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N. C. Ethics Commission 1
N. C. ETHICS COMMISSION
1324 MAIL SERVICE CENTER
ROBERT L. FARMER RALEIGH, NORTH CAROLINA 27699­1324
PERRY Y. NEWSON
CHAIRMAN ( 919) 807­4620
FAX ( 919) 807­4619
EXECUTIVE DIRECTOR
Volume 10, Issue 2 Lobbying Newsletter December 2007
“ WHEREAS, THE PEOPLE OF NORTH CAROLINA ENTRUST PUBLIC POWER TO ELECTED AND APPOINTED
OFFICIALS FOR THE PURPOSE OF FURTHERING THE PUBLIC, NOT PRIVATE OR PERSONAL, INTEREST…”
STATE GOVERNMENT ETHICS ACT, PREAMBLE
Lobbying Newsletter
The Lobbying Law, Chapter 120C of the North
Carolina General Statutes, requires that the Ethics
Commission publish a lobbying newsletter at least
annually which contains summaries of advisory opinions,
policies, procedures, and interpretive bulletins as issued
from time to time by the Commission. It must be
distributed to all designated individuals ( legislators,
legislative employees, and public servants), lobbyists, and
lobbyists’ principals and may be published electronically.
This is the Commission’s first such lobbying
newsletter. It contains edited summaries of advisory
opinions issued by the Commission through December 31,
2007. The Commission has not yet issued any formal
policies, procedures, or interpretive bulletins.
The advisory opinion summaries in this newsletter
have been modified to remove any potentially identifying
information about the requesters. Thus, they are
necessarily vague and nonspecific in some respects. They
are also summaries of the opinions, not the more complete
edited or “ redacted” versions found on the Commission’s
web site:
http:// www. ethicscommission. nc. gov/ opinions. htm.
The edited versions should be consulted for a more
complete discussion of the relevant issues involved.
Nevertheless, our hope is that these advisory opinion
summaries will provide general information and guidance
to those facing similar situations and at least give
prospective requesters an idea of the type of information
Commission staff will need in order to respond to specific
requests.
To request an advisory opinion, please contact the
Commission’s staff at ( 919) 807­4620.
Perry Y. Newson, Executive Director
Advisory Opinions in General
Advisory opinions are an integral part of the conflict of
interest identification and avoidance process. They are
provided for in the State Government Ethics Act
( Chapter 138A), the Lobbying Law ( Chapter 120C), and
the Legislative Ethics Act ( Chapter 120). They allow
requesters to receive prospective advice about real
situations they face in their public service, and formal
opinions provide the requester with limited immunity if
they follow the advice given.
The Ethics Commission will publish formal advisory
opinions at least once a year. They will be edited as
necessary to protect the requesters’ identities. They will
be listed in three distinct categories generally according
to the nature of the individual requesters: legislators
( Legislative Ethics Committee opinions), public servants
( ethics opinions), and lobbyists and lobbyists’ principals
( lobbying opinions).
“ Ethics” opinions will generally be those requested by a
public servant and involving Chapter 138A. “ Lobbying”
opinions will generally be those requested by lobbyists,
lobbyists’ principals, and other persons affected by the
Lobbying Law. “ Legislative Ethics Committee” opinions
address questions and issues raised by legislators and
are covered by a combination of Chapter 138A and
Chapter 120. Overall, there is a tremendous overlap of
and interrelationship between all three of these acts,
particularly with regard to the issue of “ gifts.”
The Ethics Commission is the final authority for
advisory opinions issued to public servants, lobbyists,
and lobbyists’ principals. For legislators, however, the
Commission issues “ recommended advisory opinions”
which the Legislative Ethics Committee then adopts,
modifies, or overrules. Once the Legislative Ethics
Committee finalizes and edits the legislative opinions,
the Committee submits them to the Ethics Commission
for publication. The Commission may only publish the
Committee’s formal advisory opinions.
N. C. Ethics Commission 2
Advisory Opinion Basics
Advisory opinions are a key part of three separate but related systems intended to give those people
impacted by the new ethics and lobbying laws prospective guidance about real or reasonably anticipated
situations they face in their public service: ( 1) the State Government Ethics Act ( Chapter 138A), ( 2) the
Lobbying Law ( Chapter 120C), and ( 3) the Legislative Ethics Act ( Chapter 120). Each of these systems has
its unique characteristics, but they all have the following aspects in common.
Written Requests. Requests for formal advisory opinions must be in writing. E­mail
constitutes a
sufficient written request. However, Commission staff frequently gives informal advice in response to verbal
requests, most commonly telephone calls. The big difference between the two means of providing advice is
immunity.
Immunity. Formal advisory opinions provide requesters with limited immunity if they follow the
advice given. Informal opinions do not. Good faith reliance upon a requested formal advisory opinion on a
specific matter immunizes the requester from investigations by the Commission, any adverse action by the
requester’s employing entity, if applicable, and investigation by the North Carolina Secretary of State for
opinions issued after August 9, 2007. Opinions do not confer immunity from any criminal investigation or
prosecution.
Prospective Application. All advisory opinions are intended to give prospective guidance about real
or reasonably anticipated fact settings or circumstances. In other words, advisory opinions look “ forward.”
They are not intended to give after­the­fact
determinations about past conduct and may not be used as de
facto complaints.
Confidentiality. Requests for advisory opinions, the opinions themselves, and all materials related
thereto are confidential and not a matter of public record, although the Commission is required to publish
edited opinions annually. Furthermore, Commission staff may share all information related to formal
advisory opinion requests pertaining to Chapter 120C ( the Lobbying Law) with staff of the Office of the
Secretary of State and all information related to formal advisory opinion requests pertaining to legislators
with staff to the Legislative Ethics Committee, all of whom must treat such information as confidential and
not a matter of public record. Finally, the Commission must forward an unedited copy of formal lobbying
opinions to the Secretary of State at the time such opinion is issued.
Publication. All formal opinions, including those issued by the Legislative Ethics Committee, must
be published in edited form to protect the identities of the individual requesters. Opinions can and will be
published electronically.
Fact­Specific.
All advisory opinions, both formal and informal, are based upon the particular facts
presented and issues raised in the specific request for an opinion. As such, the scope of each opinion is
limited to the request made and should only serve as a definitive answer to the particular requester.
Published edited formal opinions may, however, serve as a general guide to other individuals similarly
situated.
The Commission has authorized its staff to issue formal written advisory opinions pursuant to
sections 120C­102
and 138A­13
of the North Carolina General Statutes upon the receipt of a proper request.
To request an advisory opinion, please contact Commission staff at ( 919) 807­4620.
N. C. Ethics Commission 3
Advisory Opinion Statutory Provisions
The Lobbying Law – Chapter 120C
§ 120C­102.
Advisory opinions
( a) At the request of any person affected by this Chapter, the Commission shall render advisory opinions on
specific questions involving the meaning and application of this Chapter and that person's compliance therewith. The
request shall be in writing and relate to real or reasonably anticipated fact settings or circumstances. The Commission
shall issue advisory opinions having prospective application only. Good faith reliance upon a requested written
advisory opinion on a specific matter shall immunize the designated individual, lobbyist, lobbyist's principal, or other
person requesting that written advisory opinion from all of the following:
( 1) Investigation by the Commission.
( 2) Any adverse action by the employing entity.
( 3) Investigation by the Secretary of State.
( b) Staff to the Commission may issue advisory opinions under procedures adopted by the Commission.
( c) The Commission shall publish its advisory opinions at least once a year, edited as necessary to protect the
identities of the individuals requesting opinions.
( d) Except as provided under subsection ( c) of this section, requests for advisory opinions and advisory
opinions issued pursuant to this section are confidential and not matters of public record. Staff to the Commission may
share all information related to requests made under subsection ( a) of this section with staff of the Office of the
Secretary of State, and staff of the Office of the Secretary of State shall treat that information as confidential and not a
public record. The Commission shall forward an unedited copy of each advisory opinion under this section to the
Secretary of State at the time the advisory opinion is issued to the requestor, and the Secretary of State shall treat that
unedited advisory opinion as confidential and not a public record.
( e) Requests for advisory opinions may be withdrawn by the requestor at any time prior to the issuance of an
advisory opinion."
The Legislative Ethics Act – Chapter 120
§ 120­104.
Advisory opinions.
( a) At the request of any member of the General Assembly, the Committee shall render formal advisory opinions
on specific questions involving legislative ethics.
( b) The Committee shall receive and review recommended advisory opinions issued to legislators, except the
Lieutenant Governor, by the State Ethics Commission under G. S. 138A­13.
The opinion shall not be considered a
formal advisory opinion until the advisory opinion is adopted by the Committee. The Committee may modify or
overrule the recommended advisory opinions issued to legislators by the State Ethics Commission, and the final action
on the opinion by the Committee shall control.
( c) A legislator who acts in reliance on a formal advisory opinion issued by the Committee under this section shall
be entitled to the immunity granted under G. S. 138A­13(
b).
( d) Staff to the Committee may issue informal, nonbinding advisory opinions under procedures adopted by the
Committee.
( e) The Committee may interpret Chapter 138A of the General Statutes as it applies to legislators, except the
Lieutenant Governor, and these interpretations are binding on all legislators upon publication.
( f) The Committee shall submit its formal advisory opinions to the State Ethics Commission, and the State Ethics
Commission shall publish the Committee's opinions under G. S. 138A­13(
d). The Committee shall edit for publication
purposes as necessary to protect the identities of the individuals requesting opinions prior to submission to the State
Ethics Commission. The Committee may distribute the edited formal advisory opinion to members of the General
Assembly prior to publication by the State Ethics Commission.
( g) Except as provided under subsection ( f) of this section, requests for advisory opinions, advisory opinions
issued under this section, and advisory opinions received from the State Ethics Commission are confidential and not
matters of public record.
( h) Requests for advisory opinions may be withdrawn by the requestor at any time prior to the issuance of an
advisory opinion.
N. C. Ethics Commission 4
The Ethics Law – Chapter 138A
§ 138A­13.
Advisory opinions.
( a) At the request of any public servant or legislative employee, any individual who is responsible for
the supervision or appointment of a person who is a public servant or legislative employee, legal counsel for
any public servant, any ethics liaison under G. S. 138A­14,
or any member of the Commission, the
Commission shall render advisory opinions on specific questions involving the meaning and application of
this Chapter and the public servant's or legislative employee's compliance therewith. The request shall be in
writing, electronic or otherwise, and relate prospectively to real or reasonably anticipated fact settings or
circumstances. On its own motion, the Commission may render advisory opinions on specific questions
involving the meaning and application of this Chapter. The Commission shall issue advisory opinions
having prospective application only. Reliance upon a requested written advisory opinion on a specific matter
shall immunize the public servant or legislative employee, on that matter, from all of the following:
( 1) Investigation by the Commission, except for an inquiry under G. S. 138A­12(
b)( 3).
( 2) Any adverse action by the employing entity.
( 3) Investigation by the Secretary of State.
( b) At the request of a legislator, the Commission shall render recommended advisory opinions on
specific questions involving the meaning and application of this Chapter and Part 1 of Article 14 of Chapter
120 of the General Statutes, and the legislator's compliance therewith. The request shall be in writing,
electronic or otherwise, and relate prospectively to real or reasonably anticipated fact settings or
circumstances. The Commission shall issue advisory opinions having prospective application only. Until
action is taken by the Committee under G. S. 120­104,
reliance upon a requested written advisory opinion on
a specific matter shall immunize the legislator, on that matter, from all of the following:
( 1) Investigation by the Committee or Commission, except for an inquiry under
G. S. 138A­12(
b)( 3).
( 2) Any adverse action by the house of which the legislator is a member.
( 3) Investigation by the Secretary of State.
Any advisory opinion issued to a legislator under this subsection shall immediately be delivered to the chairs
of the Committee, together with a copy of the request. Except for the Lieutenant Governor, the immunity
granted under this subsection shall not apply after the time the Committee modifies or overturns the advisory
opinion of the Commission in accordance with G. S. 120­104.
( c) Staff to the Commission may issue advisory opinions under procedures adopted by the
Commission.
( d) The Commission shall publish its advisory opinions at least once a year. These advisory opinions
shall be edited for publication purposes as necessary to protect the identities of the individuals requesting
opinions. When the Commission issues a recommended opinion to a legislator under subsection ( b) of this
section, the Commission shall publish only the formal advisory opinion of the Committee upon its
submission to the Commission.
( e) Except as provided under subsection ( d) of this section, requests for advisory opinions, and
advisory opinions issued under this section, are confidential and not public records. Staff to the Commission
may share all information related to requests made under subsection ( b) of this section with staff to the
Committee, and staff to the Committee shall treat that information as confidential and not a public record.
( f) This section shall not apply to judicial officers.
( g) Requests for advisory opinions may be withdrawn by the requestor at any time prior to the
issuance of an advisory opinion.
N. C. Ethics Commission 5
ADVISORY OPINION SUMMARIES
LOBBYING OPINIONS – CHAPTER 120C
AO­L­07­0001
Legislative Breakfast & Gift Ban Exceptions – “ Public Events” & “ Educational Meetings.”
G. S. 138A­32(
e)( 1) ; 138A­3(
29) ; and 138A­32(
e)( 3)( i)
October 29, 2007
A lobbyist asked whether under the new ethics and lobbying laws a lobbyist principal association
(“ association”) could sponsor a legislative breakfast for incoming freshman legislators. The lobbyist stated
that all freshman legislators would be invited and 10 to 12 members of the association would be present
along with some of the association’s staff members, including registered lobbyists. The purpose of the
meeting was to provide an overview of issues of interest to the association, the role of the association with
regard to those issues, and to discuss related legislative issues in general and potential 2007 legislation in
particular.
N. C. G. S. § 120C­303(
a) and § 138A­32(
c) prohibit a lobbyist principal association from providing this gift
of food and beverages at the “ freshman” legislative reception, unless the event meets an exception to the gift
ban pursuant to N. C. G. S. § 138A­32(
e). In reviewing the § 138A­32(
e) gift ban exceptions, the
association’s “ freshman” legislative breakfast did not fit under one of the gift ban exceptions.
N. C. G. S. § 138A­32(
e)( 1) pertains to food and beverages for immediate consumption provided at a “ public
event.” In reviewing the subsections for this section that applied to legislators and applying the facts
provided, the exception did not fit. Foremost, this legislative breakfast was not open to the general public,
and all of the members of the North Carolina General Assembly (“ GA”) were not invited. Therefore, this
legislative breakfast did not meet the definition of public event under N. C. G. S. § 138A­3(
29) a. 1.
Moreover, the newly elected freshman legislators are currently not a recognized legislative caucus,
delegation, or standing committee; therefore, the association’s “ freshman” legislative breakfast did not meet
the first requirement of public event in N. C. G. S § 138A­3(
29) a. 2. Accordingly, the association’s planned
“ freshman” legislative breakfast did not meet either of the definitions of public event for legislators. 1
Another possible gift ban exception in this situation involves “ educational meetings.” There is a gift ban
exception under N. C. G. S. § 138A­32(
e)( 3)( i) for certain “ reasonable actual expenditures,” including food
1 For future reference note that section 24 of House Bill 1111 ( Session Law 2007­348)
amended the
definition of “ public event” under N. C. G. S. § 138A­3(
29) and eliminated the two separate subsections, one
for legislators and legislative employees, and another for public servants. Pursuant to section 24 of HB
1111, there are now five definitions of “ public event” under N. C. G. S. § 138A­3(
29), and if the sponsoring
person and their/ its event meet all of the requirements of any one of these five definitions, the event is a
public event for legislators, legislative employees, and public servants. Section 24 of HB 1111 became
effective on August 9, 2007. The freshman legislative breakfast under consideration here would still not
qualify as a “ public event” under any of the five definitions of “ public event” created by section 24 of HB
1111.
N. C. Ethics Commission 6
and beverage expenditures, of a legislator incurred at an “ educational meeting” if certain requirements are
met. The statute does not define “ educational meeting,” and at the time this advisory opinion was issued, it
was unclear how the Commission would define that term. The Commission did address this issue at its
February 22, 2007, meeting and adopted some non­exclusive
factors to be used as criteria for determining
what is an “ educational meeting” under N. C. G. S. § 138A­32(
e)( 3)( i) (“ Criteria”). 2 See Attachment A below.
Whether a particular meeting, conference, or other event will be considered an educational meeting is a fact­specific,
case­by­case
determination. Since specific facts are critical to this determination, and the initial
request letter did not provide sufficient details about the proposed event, Commission staff was unable to
determine if it would have qualified under the § 138A­32(
e)( 3)( i) gift ban exception. See the educational
meeting Criteria referenced above. For example, staff would need to know the identity of the speaker( s) and
the general nature of each speaker’s presentation, as well as the overall agenda for the entire breakfast
meeting. Also, staff would need to know more about the association’s legislative agenda and any plans it had
for the introduction or support of specific legislation.
However, if legislative issues, questions, and/ or legislative agendas were going to be a significant part of this
particular breakfast meeting, the meeting would probably not be considered an educational meeting under
the new laws. The requester stated that both potential 2007 legislative issues and general legislative issues
were going to be discussed at the legislative breakfast, but did not provide the amount of time that was going
to be spent on these legislative issues. This information would be an important factor along with the other
factors addressed in the above­referenced
Criteria. See attached. Without such information, staff could not
make a determination as to whether the association’s legislative breakfast met the educational meeting
exception under N. C. G. S. § 138A­32(
e)( 3)( i).
Based upon the forgoing analysis, the association in question could not provide the freshman legislators this
breakfast at no charge. Note that if each legislator paid fair market value for his or her breakfast, the
association’s breakfast would not have been a gift and the freshman legislators could have accepted the free
meal. See N. C. G. S § 138A­3(
15) a.
Attachment A ­­Educational
Meeting Criteria:
Criteria for Determining an “ Educational Meeting” Under § 138A­32(
e)( 3)( i)
While there is an exception to the gifts ban for expenditures associated with “ educational meetings,” the
statute does not define that key term. So the Commission and its staff are left with the task of determining
what is “ an educational meeting.”
Without a statutory definition, and until the Commission attempts to define “ educational meeting” through
formal or informal rulemaking, our best option is to apply various non­exclusive
factors or criteria to the
specific situations with which we are presented. Determining what is or is not an “ educational meeting”
involves applying these non­exclusive
factors or criteria on a fact­specific,
case­by­case
basis. To aid that fact­specific
determination, the Commission has adopted the following criteria. Again, the list is non­exclusive,
and the Commission may modify it as necessary in the future.
Remember that an “ educational meeting” must be for purposes primarily related to the public duties
and responsibilities of the public servant, legislator, or legislative employee.
2 Attached to this advisory opinion is a copy of these non­exclusive
factors titled “ Criteria for Determining
an ‘ Educational Meeting’ under N. C. G. S. § 138A­32(
e)( 3)( i).” The Commission has applied these Criteria
in another advisory opinion issued in response to another requester. [ See AO­L­07­0012.]
N. C. Ethics Commission 7
In applying these factors, the focus of the Commission will be on the intent of the donor and the recipient’s
knowledge of that intent. The determination as to whether a meeting is “ educational” will vary according to
the facts and circumstances of each meeting.
I. Is the educational content of the meeting related to a specific public duty or responsibility of the
public servant, legislator, or legislative employee?
If so, what specific duty or responsibility?
· for legislators and legislative employees, this will be interpreted very broadly;
· for public servants, less so because of the scope of their public duties.
If the content of the meeting is not primarily related to a specific duty or responsibility of a public
servant, legislator, or legislative employee, then it probably does not qualify as an educational meeting
under this section.
II. Is the primary purpose of the meeting educational?
A. If the meeting’s primary purpose is to influence a public servant, legislator, or legislative
employee with respect to executive or legislative action ( rather than educate them on a legitimate
subject), the meeting is not “ educational.” A meeting primarily intended to promote learning for self­improvement
relative to the public duties of a person is “ educational,” not a meeting intended to curry
favor concretely.
Meetings intended to influence rather than educate may include meetings that are directly related to an
upcoming official vote, recommendation, or other action that the public servant, legislator, or
legislative employee may take, such as the discussion of a legislative or executive agenda or specific
concerns with respect to a matter that would require legislative or executive action to remedy.
In determining the purpose of the meeting, the Commission will consider whether the entity holding
the meeting:
· has legislation pending before the General Assembly or intends to request legislative action;
· is seeking, or seeking to impact, North Carolina legislative or executive action at the time of
the meeting;
· can be impacted by the actions or decisions of the public servant, legislator, or legislative
employee; or
· if the facts demonstrate that the entity’s purpose in holding the meeting is to advocate on
behalf of legislative or executive action.
B. What is the nature of the entity holding the meeting?
· Is the entity a State agency or governmental entity?
· Is the entity an educational institution?
· Is the entity an organization that routinely sponsors meetings with educational content?
· Is the entity holding the meeting a Lobbyist Principal?
C. Is the Lobbyist Principal paying for the meeting also sponsoring the meeting?
· Is the source of the funding ( gift) the same as the source of the education ( as opposed to a
Lobbyist Principal paying to send a public servant, legislator, or legislative employee to
another entity’s meeting)?
D. What is the complete agenda of the meeting?
· What proportion of the individual events scheduled at the meeting have a speaker, roundtable
discussion, or other educational content that is directly related to the public duties of the
public servant, legislator, or legislative employee?
N. C. Ethics Commission 8
· What proportion of those sessions is held in the absence of a meal or entertainment?
· What proportion of the meeting agenda includes meals or entertainment with formal
educational content?
· Does the agenda cover a wide range of topics or have a very limited, industry­specific
focus?
· Would the meeting take place regardless of whether the invited public servant, legislator, or
legislative employee attends?
· Who are the speakers?
· Are they associated with the Lobbyist Principal or its Lobbyist?
· Are they outside experts in their field?
E. Is the location of the meeting directly related to the meeting’s educational content?
· Is there a reason for holding the meeting in a location other than where the attendees live or
work?
· Is it necessary to the meeting’s educational purpose that an individual travel in connection
with the meeting?
· Is the meeting sponsored by a state, national, or international organization for the benefit of its
state, national, or international membership?
· Is the location of the meeting otherwise integral to the educational content of the meeting?
· Would an individual be capable of obtaining a comparable degree of educational information
through other means that would not require travel?
F. Is the length of the educational meeting reasonably necessary to fulfilling the educational
purpose of the trip?
G. What degree of personal benefit does the individual gain from attendance at the meeting?
· Does the personal benefit outweigh the public benefit gained by the educational value of the
meeting?
H. Are there other factors that would support the conclusion that the meeting is educational?
AO­L­07­0002
3
Designated Individuals Acting in Their Official Capacity Do Not Need to Register as “ Liaison Personnel.”
G. S. 120C­700
May 18, 2007
A “ public servant” requested a formal advisory opinion on whether he or she had to register as a “ lobbyist”
pursuant to North Carolina General Statutes (“ N. C. G. S.”) Chapter 120C, the new Lobbying Law. Public
servants are also “ designated individuals” under the Lobbying Law. 4
Part of the public servant/ designated individual’s responsibilities and duties include advocating for
legislative and executive action through direct communications with legislators, legislative employees, and
other public servants. All of these advocacy responsibilities and duties relate solely to matters pertaining to
the public servant/ designated individual’s government employment and his or her official position.
3 Note: This opinion deals with the same substantive issue as AO­L­07­0004.
4 “ Designated individuals” include legislators, legislative employees, and public servants. N. C. G. S. § 120C­100(
a)( 2). “ Public servants” are defined in N. C. G. S. § 138A­3(
30).
N. C. Ethics Commission 9
Under these facts, the public servant/ designated individual did not need to register as a liaison personnel. 5
Except for certain gift and scholarship reporting purposes, designated individuals are exempt from the
lobbying law while they are acting in their official capacities. N. C. G. S. § 120C­700
( 6). Therefore, as long as
the public servant/ designated individual is acting in his or her official capacity when advocating for
legislative or executive action, that person is exempt from the general requirements of Chapter 120C and
does not need to register as a liaison personnel. 6 A public servant/ designated individual may also be exempt
pursuant to N. C. G. S. § 120C­700
( 3) as a State employee appearing solely in connection with matters
pertaining to his or her office and public duties.
AO­L­07­0003
“ Educational Meeting” and “ Public Event” Gift Ban Exceptions.
G. S. 138A­32(
e)( 1) ; 138A­3(
29) ; and 138A­32(
e)( 3)( i)
November 28, 2007
A lobbyist requested guidance on determining and developing criteria for an “ educational dinner” being
coordinated for a group of legislators and a presumed lobbyist principal company. The lobbyist also asked
who could pay for this dinner for these legislators based on the new Lobbying Law ( Chapter 120C) and the
new State Government Ethics Act ( Chapter 138A).
Initially, the lobbyist asked the Commission to develop criteria to follow for this “ meeting.” This part of the
request was not a request for an advisory opinion under the law. Lobbyists and lobbyist principals, not the
Commission or its staff, must determine how particular events will be planned, organized, and conducted.
Once that is done, Commission staff will apply the applicable legal standards to the particular facts
presented.
The remainder of the request was relatively vague and nonspecific, making it hard to give definitive
answers. For example, the request did not specifically state whether the potential corporate participant was a
lobbyist principal or whether the requester was that entity’s official lobbyist. Nor did the request state who
was going to pay for this dinner event or for each of the legislator’s meals. Therefore, certain assumptions
were made for purposes of issuing this opinion. For example, it was assumed that the potential corporate
participant was a lobbyist principal and the requester was its lobbyist. In addition, it was assumed that the
lobbyist principal was the “ person” that was planning on paying for this dinner event and for each
legislator’s meal.
5 While the original request and an earlier opinion spoke in terms of potential registration as a “ lobbyist,”
the correct term is really “ liaison personnel.” The end result is the same. Chapter 120C requires all agencies
and constitutional officers of the State to designate “ liaison personnel” to lobby for legislative action and
forbids the use of State funds to hire outside, non­State
employees to engage in legislative lobbying.
N. C. G. S. § 120C­500(
a) & ( b).
6 If a designated individual accepts reportable expenditures made for the purpose of lobbying, or
“ scholarships” as defined in N. C. G. S. § 120C­800
( g), either the designated individual or the donor may need
to report those items with the Secretary of State’s office. See N. C. G. S. § 120C­800.
N. C. Ethics Commission 10
Based on these assumptions, this gift of food and beverage at this “ legislative” dinner event was prohibited
under N. C. G. S. § 120C­303(
a) and § 138A­32(
c), unless it met an exception to the gift ban pursuant to
N. C. G. S. § 138A­32(
e).
The initial request referred to this event as an “ educational” dinner for a designated group of legislators.
Therefore, one possible exception to the general gift ban is the “ educational meeting” exception of § 138A­32(
e)( 3)( i). This gift ban exception covers certain “ reasonable actual expenditures,” including food and
beverage expenditures, of a legislator incurred at an “ educational” meeting if certain requirements are met.
The statute does not define “ educational meeting,” and at the time this advisory opinion was issued, it was
unclear how the Commission would define that term. The Commission did address this issue at its February
22, 2007, meeting and adopted some non­exclusive
factors to be used as criteria for determining what is an
“ educational meeting” under N. C. G. S. § 138A­32(
e)( 3)( i) (“ Criteria”). 7 See attached.
Whether a particular meeting, conference, or other event will be considered an educational meeting is a fact­specific,
case­by­case
determination. Since specific facts are critical to this determination, and the initial
request letter did not provide sufficient details about the proposed legislative dinner, Commission staff was
unable to determine if it would have qualified under the § 138A­32(
e)( 3)( i) gift ban exception. See the
educational meeting Criteria referenced above.
However, another exception may have applied – the “ public event” exception of § 138A­32(
e)( 1). N. C. G. S.
§ 138A­32(
e)( 1) pertains to food and beverage for immediate consumption provided at a “ public event.”
Public event is defined in N. C. G. S. § 138A­3(
29). 8 Prior to the passage of House Bill 1111 ( Session Law
2007­348)
on August 9, 2007, the definition of “ public event” had two separate subsections, one for
legislators and legislative employees, and another for public servants. If both legislators and public servants
were invited to a prospective public event, all requirements of both subsections had to be met in order satisfy
this exception, including who must be invited to the organized gathering.
N. C. G. S. § 138A­3(
29) a. 2 had a two­pronged
test . 9 The first prong is that the “ person” ( person is broadly
defined under N. C. G. S. § 138A­3(
27) and includes business entities and associations) sponsoring the event
must invite either the entire membership of the House of Representatives or of the Senate, or the entire
membership of one of the statutorily­listed
legislative subgroups, which include legislative committees and
standing subcommittees. The committee or standing subcommittee referenced in N. C. G. S. § 138A­3(
29) a. 2
7 Attached to this advisory opinion is a copy of these non­exclusive
factors titled “ Criteria for Determining
an ‘ Educational Meeting’ under N. C. G. S. § 138A­32(
e)( 3)( i).” The Commission has applied these Criteria
in another advisory opinion issued in response to another requester. [ See AO­L­07­0012.]
8 Section 24 of House Bill 1111 ( Session Law 2007­348)
amended the definition of “ public event” under
N. C. G. S. § 138A­3(
29) and eliminated the two separate subsections ( one for legislators/ legislative
employees and one for public servants). Pursuant to the new legislative changes, there are now five
definitions of “ public event” under N. C. G. S. § 138A­3(
29), and if the sponsoring person and their/ its event
meet all of the requirements of any one of these five definitions, the event is a public event for all covered
attendees ( legislators, legislative employees, and public servants). Thus it is no longer necessary to meet
both sets of requirements.
9 The amended definition of “ public event” ( section 24 of HB 1111) resulted in N. C. G. S. § 138A­3(
29) a. 2
being renumbered as N. C. G. S. § 138A­3(
29) b. The two­pronged
test contained in § 138A­3(
29) a. 2 remains
under § 138A­3(
29) b.
N. C. Ethics Commission 11
must be an existing and recognized committee or standing subcommittee established pursuant to the rules of
the Senate or House. 10
Commission staff has determined that invitations under the Ethics Act and the Lobbying Law must be in
writing ( e­mails
are included as a written invitation), be sent out at least ten ( 10) days in advance of the
event, state the date, time and location of the event, identify the event, and list the names of the sponsors of
the event. Thus, the sponsoring lobbyists, lobbyist principals, and “ interested persons” 11 must be identified
and known prior to the event occurring.
After meeting this first invitation prong, a second prong must also be met. This second prong of N. C. G. S. §
138A­3(
29) a. 2 12 can be met in three ways, depending upon who/ what is determined to be the “ person”
holding the organized gathering. The three ways are as follows:
( I) at least 10 individuals associated with the person actually attend, other than the legislator or
their immediate family; or
( II) all shareholders, employees, board members, officers, members, or subscribers of the person located
in North Carolina are notified and invited to attend; or
( III) the person is a governmental body and the gathering is subject to the open meetings law.
The lobbyist here planned to invite a designated group of legislators, who were members of a specific Senate
or House committee, to this dinner. At the time this formal advisory opinion was issued, the specific
standing committees referenced in the request had been established by rule in both the Senate and the House;
however, no legislators had been formally appointed to them. Once members were appointed to these
committees, the lobbyist principal’s dinner event invitation to the entire membership of either standing
committee would have resulted in the dinner event meeting one of the initial requirements of N. C. G. S. §
138A­3(
29) a. 2. In addition to meeting an initial requirement stated in § 138A­3(
29) a. 2, the lobbyist
principal also had to meet either subsection ( I) or subsection ( II) of § 138A­3(
29) a. 2 13 for the gift ban
exemption for food and beverage for immediate consumption at a public event to apply to legislators.
10 Recognized standing committees and subcommittees of the 2007 General Assembly are those established
in accordance with Senate Rule 32 and House Rule 26 of the 2007 General Assembly, and by resolution of
the Senate or House. When the General Assembly adjourns the 2008 Regular Session of the General
Assembly sine die, these committees will no longer exist.
11 “ Interested person” is a non­statutory
term used by Commission staff to describe those persons set out in
§ 138A­32(
d), as amended by sections 36 and 37 of HB 1111, and as expanded by the definition of “ person”
in 138A­3(
27), as amended by section 23 of HB 1111. An “ interested person” is a person who ( 1) is doing or
seeking to do business of any kind with the employing entity of the public servant who is being offered or
given the gift; ( 2) is engaged in activities that are regulated or controlled by the employing entity of the
public servant being offered or given the gift; or ( 3) has financial interests that may be substantially and
materially affected, in a manner distinguishable from the public generally, by the performance or
nonperformance of the official duties of the public servant who is offered or given the gift. A public servant
can only accept a gift, directly or indirectly, from an “ interested person” if the gift meets a gift ban
exemption listed in 138­32(
e).
12 N. C. G. S. § 138A­3(
29) a. 2 is now N. C. G. S. § 138A­3(
29) b.
13 Since the lobbyist principal is not a governmental body, subsection III of N. C. G. S. § 138A­3(
29) a. 2 ( now
renumbered as § 138A­3(
29) b. 3) would not be applicable.
N. C. Ethics Commission 12
The request letter did not state specifically who the lobbyist principal was planning on inviting in addition to
the designated group of legislators; however, several questions seemed to be based on the requirements
stated in subsections ( I) and ( II) of N. C. G. S. § 138A­3(
29) a. 2. Specifically, it was asked whether an
employee of the person, in this case the lobbyist principal, would be deemed to be associated with the
person. Yes, an employee of the lobbyist principal here would be an individual associated with the lobbyist
principal for the purposes of meeting the requirement of the gift ban exemption under § 138A­3(
29) a. 2. I. 14
It was also asked whether members of advocacy groups would qualify as “ individuals associated with the
person.” Whether an individual is “ associated with the person” will often be determined by the Commission
on a case­by­case
basis depending upon the facts of the connection with the person to which the gift ban
applies. The request letter did not contain the necessary details for the Commission to make a determination
as to whether members of an unnamed and unidentified advocacy group would be deemed to be “ individuals
associated with” the lobbyist principal. Accordingly, the Commission could not determine whether the
attendance of at least 10 members of an advocacy group at this lobbyist principal’s legislative dinner would
meet the subsection ( I) requirements.
The final question appeared to be asking whether the invitation of all of the lobbyist principal’s employees
located in North Carolina would satisfy the requirement of the gift ban exemption under § 138A­3(
29) a. 2. II. 15 Assuming that the lobbyist principal had invited all of the appointed members of the Senate or
House standing committee as discussed above, thus meeting the first prong of N. C. G. S. § 138A­3(
29) a. 2,
then if the lobbyist principal formally notified and invited all of its employees located in North Carolina to
this legislative dinner, the proposed legislative dinner would have met the § 138A­3(
29) a. 2. II gift ban
exemption and the lobbyist principal could have provided food and beverages for immediate consumption to
the invited legislators.
In the future, all requesters should provide the Commission with the actual or reasonably anticipated details
of planned events, such as who is actually being invited, rather than giving hypothetical invitees. N. C. G. S. §
120C­102
requires as much, and providing these details will assist the Commission in answering questions
in a more direct and thorough manner while expediting the Commission’s response time. In addition, the
limited civil immunity granted by the Commission from investigation by the Commission is exclusively tied
to the specific facts and circumstance addressed and answered by the Commission in the written advisory
opinion. Therefore, any questions or issues raised that the Commission could not address, including those
that lacked sufficient detail, are not covered by this written advisory opinion.
Attachment A ­­Educational
Meeting Criteria: see AO­L­07­0001
above.
14 N. C. G. S. § 138A­3(
29) a. 2. I is now renumbered as § 138A­3(
29) b. 1.
15 N. C. G. S. § 138A­3(
29) a. 2. II is now renumbered as § 138A­3(
29) b. 2.
N. C. Ethics Commission 13
AO­L­07­0004
16
Designated Individuals Acting in Their Official Capacity Do Not Need to Register as “ Liaison Personnel.”
G. S. 120C­700
May 18, 2007
A “ public servant�� requested a formal advisory opinion on whether he or she had to register as a “ lobbyist”
pursuant to North Carolina General Statutes (“ N. C. G. S.”) Chapter 120C, the new Lobbying Law. Public
servants are also “ designated individuals” under the Lobbying Law. 17
Part of the public servant/ designated individual’s responsibilities and duties include advocating for
legislative and executive action through direct communications with legislators, legislative employees, and
other public servants. All of these advocacy responsibilities and duties relate solely to matters pertaining to
the public servant/ designated individual’s government employment and his or her official position.
Under these facts, the public servant/ designated individual did not need to register as a liaison personnel. 18
Except for certain gift and scholarship reporting purposes, designated individuals are exempt from the
lobbying law while they are acting in their official capacities. N. C. G. S. § 120C­700
( 6). Therefore, as long as
the public servant/ designated individual is acting in his or her official capacity when advocating for
legislative or executive action, that person is exempt from the general requirements of Chapter 120C and
does not need to register as a liaison personnel. 19 A public servant/ designated individual may also be exempt
pursuant to N. C. G. S. § 120C­700
( 3) as a State employee appearing solely in connection with matters
pertaining to his or her office and public duties.
AO­L­07­0005
Legislative Reception, Indirect Gifts, & the “ Public Event” Gift Ban Exception.
G. S. 138A­32(
e)( 1)
October 3, 2007
A North Carolina organization (“ Organization”) asked for an opinion concerning the hosting and
sponsorship of a legislative reception for all newly­elected
members of the North Carolina General
Assembly (“ GA”). While the hosting Organization is not a lobbyist principal, many lobbyist principals are
helping sponsor the legislative reception. Specifically, this legislative reception would be sponsored by
approximately 60 different sponsors, many of which were lobbyist principals. All members of the GA were
16 Note: This opinion deals with the same substantive issue as AO­L­07­0002.
17 “ Designated individuals” include legislators, legislative employees, and public servants. N. C. G. S. §
120C­100(
a)( 2). “ Public servants” are defined in N. C. G. S. § 138A­3(
30).
18 While the original request and an earlier opinion spoke in terms of potential registration as a “ lobbyist,”
the correct term is really “ liaison personnel.” The end result is the same. Chapter 120C requires all agencies
and constitutional officers of the State to designate “ liaison personnel” to lobby for legislative action and
forbids the use of State funds to hire outside, non­State
employees to engage in legislative lobbying.
N. C. G. S. § 120C­500(
a) & ( b).
19 If a designated individual accepts reportable expenditures made for the purpose of lobbying, or
“ scholarships” as defined in N. C. G. S. § 120C­800
( g), either the designated individual or the donor may need
to report those items with the Secretary of State’s office. See N. C. G. S. § 120C­800.
N. C. Ethics Commission 14
invited along with all Council of State members, all Supreme Court justices and Court of Appeals judges,
the Governor and his Cabinet, and all North Carolina members of the United States Congress. Although the
legislative reception was technically “ open to the general public,” there would be a substantial charge to the
public to attend this reception.
The hosting Organization asked the following questions: ( 1) who is actually giving the food and beverages at
this legislative reception when sponsors give the money to the Organization specifically for the purpose of
paying for the reception and the Organization then directly contracts with and pays for catering the
reception; ( 2) if the food and beverages are determined to be given by the sponsors, including lobbyist
principals, does this legislative reception meet an exception to the gift ban; and ( 3) if the food and beverages
can be given, who must report the expenditures to the Secretary of State’s Office?
Based on the fact that the sponsors were specifically giving the money to the Organization to pay for the
legislative reception, the sponsors were indirectly giving the gifts of food and beverages to the legislators
and public servants. Since some of the sponsors were lobbyist principals, this gift of food and beverages
was prohibited under N. C. G. S. § § 120C­303(
a) and 138A­32(
c), unless it met an exception to the gift ban
pursuant to N. C. G. S. § 138A­32(
e). Based upon the specific facts provided by the requester, it was
determined that the § 138A­32(
e)( 1) exception for food and beverages consumed at a “ public event” may be
applicable if this legislative reception met all of the requirements to be a public event for both legislators and
public servants.
“ Public event” is defined in N. C. G. S. § 138A­3(
29). Prior to the passage of House Bill 1111 on August 9,
2007, the definition of “ public event” had two separate subsections ­­one
for legislators/ legislative
employees and one for public servants. If both legislators and public servants were invited to a prospective
public event, all requirements of both subsections had to be met in order satisfy this exception, including
who must be invited to the organized gathering. 20
Although it was initially stated that the legislative reception was “ open to the general public,” in fact there
would be a substantial charge per person to attend this reception, while legislators and public servants would
be admitted free of charge. The issue of whether an event that has a charge to attend is truly “ open to the
general public” has not been addressed by the Ethics Commission. However, this legislative reception may
not have been “ open to the general public” making the then­existing
§ 138A­3(
29) a. 1. public event
definition for legislators and the then­existing
§ 138A­3(
29) b. 1. public event definition for public servants
inapplicable. Charging the general public to attend a legislative reception may also make the post­HB
1111
and current definitions of public event as defined in § 138A­3(
29) a. and § 138A­3(
29) c. inapplicable.
However, that issue did not need to be addressed at this time because this particular legislative reception
may have met some of the other definitions of public event contained in § 138A­3(
29) for legislators and
public servants, both pre­HB
1111 and post­HB
1111, based upon who was being notified and invited to
attend.
N. C. G. S. § 138A­3(
29) a. 2. II. applied when the event was an organized gathering of a person
20 Section 24 of House Bill 1111 amended the definition of “ public event” under N. C. G. S. § 138A­3(
29)
and eliminated the two separate subsections ( one for legislators/ legislative employees and one for public
servants). Pursuant to the new legislative changes, there are now five definitions of “ public event” under
N. C. G. S. § 138A­3(
29), and if the sponsoring person and their/ its event meet all of the requirements of any
one of these five definitions, the event is a public event for all covered attendees ( legislators, legislative
employees, and public servants). Thus it is no longer necessary to meet both sets of requirements.
N. C. Ethics Commission 15
( person is broadly defined under N. C. G. S. § 138A­3(
27) and includes business entities, associations, and
organizations) to which the entire GA was invited and to which all shareholders, employees, board members,
officers, members or subscribers of the person located in North Carolina were notified and invited to attend.
Accordingly, since all members of the GA were invited, if each sponsor formally notified and invited all of
its board members or all of its officers who were located in North Carolina to this legislative reception, the
proposed legislative reception would have met the 138A­3(
29) a. 2. definition of “ public event” and the
lobbyist principals would have been allowed to give legislators food and beverages for immediate
consumption at this reception per the § 138A­32(
e)( 1) gift ban exemption.
A similar public event provision pertained to public servants. The § 138A­3(
29) b. 3. public event exemption
applied when the event was an organized gathering of a person to which at least 10 public servants were
invited and to which all shareholders, employees, board members, officers, members or subscribers of the
person located in a specific North Carolina office or county were notified and invited to attend. Since more
than 10 public servants were invited, if each sponsor formally notified and invited all of its board members
or all of its officers who were located in a specific North Carolina office or county to this legislative
reception, the proposed legislative reception would have met the 138A­3(
29) b. 3. definition of “ public event”
and the lobbyist principals would have been allowed to give legislators food and beverages for immediate
consumption at this reception.
After the passage of HB 1111 on August 9, 2007, if a person and their event meet all of the requirements of
any one of the five definitions of “ public event” contained in § 138A­3(
29), the person may give the gift of
food and beverages for immediate consumption under the gift ban exemption of 138A­32(
e)( 1) to legislators,
legislative employees, and public servants. The person( s) sponsoring the event no longer needs to meet the
requirements of two separate subsections or two different definitions of “ public event” in order to give to
different types of designated individuals ( legislators, legislative employees, and public servants) under this
gift ban exception.
The hosting Organization also asked who should report the expenditures for the food and beverages given to
the legislators and public servants at this reception. N. C. G. S. § 120C­403(
b)( 5) requires each lobbyist
principal to report, among other things, all reportable expenditures made for the purpose of lobbying, all
reportable expenditures for gifts given under any of the gift ban exemptions of N. C. G. S. § 138A­32(
e) ( 1) –
( 9), ­(
e)( 11), ­(
e)( 12), 21 and all gifts given under the gift ban exemption of N. C. G. S. § 138A­32(
e)( 10) with a
value of more than $ 200. The lobbyist principal reports are to be filed with the Secretary of State’s Office
quarterly when the GA is not in session and monthly when the GA is in session. N. C. G. S. § 120C­403(
a)
and ( c).
Accordingly, the sponsors who are lobbyist principals are required to report the food and beverages
expenditures on their lobbyist principal reports they each file with the Secretary of State’s Office if the value
of the expenditure is greater than $ 10 per day per individual legislator, individual public servant, or that
individual’s immediate family. N. C. G. S. § § 120C­403(
b)( 5) and 120C­100(
a)( 12) a. The sponsors who are
not lobbyist principals, such as the hosting Organization, need to report expenditures made for the purpose
of lobbying if the reportable expenditures given per individual legislator, individual public servant, or that
person’s immediate family equal a total cumulative value of over $ 200 in a calendar quarter. N. C. G. S. §
120C­800
( a).
21 House Bill 1111 also added two new gift ban exceptions under N. C. G. S. § 138A­32(
e). See Section 41 of
HB 1111. These gift ban exemptions of –( e)( 11) and –( e)( 12) are retroactive to January 1, 2007. See
Section 44 of HB 1111.
N. C. Ethics Commission 16
AO­L­07­0006
Lobbyist Giving Legislator a Free Ride; Gift Ban Exceptions – Personal Relationship Exception; Reporting.
G. S. 138A­32(
e)( 10) ; 120C­401(
b) ; 120C­402(
b)
September 12, 2007
A lobbyist requested an opinion as to whether he or she could provide a ride in a rental car to a “ designated
individual” 22 while both persons were traveling out­of­state
on a personal, non­public
service related trip.
Specifically, the lobbyist was flying out­of­state
to attend a sporting event and planned to rent a car for local
transportation. A designated individual, who is also a former college classmate and personal friend of the
lobbyist, was also planning on attending this sporting event. The lobbyist asked whether giving this
designated individual a ride from the airport to the hotel in the rental vehicle was allowed under the new
Ethics and Lobbying laws and if so what reporting obligations would apply.
Under the new Lobbying Law, a lobbyist is prohibited from giving a gift to a designated individual unless
the gift meets one of the gift ban exceptions. N. C. G. S. § 120C­303(
a). There is no “ nominal” or small­gift
exception to the general gift ban. A gift is defined as anything of monetary value given or received without
valuable consideration by or from a lobbyist or lobbyist principal, with certain exceptions. N. C. G. S. § 138A­3(
15). 23
Accordingly, pursuant to the statute, a free ride in a rental vehicle would constitute a “ gift” if not paid for. A
free ride from the airport to the hotel would have to meet a gift ban exception for the lobbyist to be able to
give it and for the designated individual to be able to accept it.
N. C. G. S. § 138A­32(
e) lists a number of specific gift ban exceptions. One of these listed gift ban exceptions
applies to gifts given for fraternal or personal reasons and not given for the purpose of lobbying. N. C. G. S. §
138A­32(
e)( 10). This gift ban exemption excludes,
Gifts given or received as part of a business, civic, religious, fraternal,
personal, or commercial relationship not related to the person’s public service
or position and made under circumstances that a reasonable person would
conclude that the gift was not given for the purpose of lobbying.
Based on the lobbyist��s fraternal and personal relationship with this designated individual, which is not
related to the designated individual’s public service and position, and the fact that the lobbyist was giving
the ride based on this relationship and not for the purpose of lobbying, the 138A­32(
e)( 10) gift ban exception
applied to this situation. Therefore, the lobbyist could give and the designated individual could accept the
ride without paying for it. However, the lobbyist would need to report the value of the ride on the lobbyist
reports that are filed with the Secretary of State’s Office covering the time period that the ride was given.
N. C. G. S. § 120C­402.
22 “ Designated individuals” include legislators, legislative employees, and public servants. N. C. G. S. §
120C­100(
a)( 2). The designated individual here is a legislator.
23 On August 9, 2007, House Bill 1111 was signed into law. Section 21 of HB 1111 amended N. C. G. S. §
138A­3(
15) and clarified that the definition of gift included anything of monetary value given or received
without valuable consideration by or from a lobbyist, lobbyist principal, legislative liaison personnel or a
person described under N. C. G. S. § 138A­32(
d)( 1), ( 2), or ( 3) ( changes in italics). Section 21 of HB 1111 is
effective October 1, 2007.
N. C. Ethics Commission 17
The Lobbying Law requires lobbyists to report, among other things, the fair market value or face value, if
shown, of all gifts given under the N. C. G. S. § 138A­32(
e)( 10) gift ban exception. N. C. G. S. § 120C­401(
b)
and 402( b)( 4). 24 There are a number of ways one could determine the fair market value of the ride to the
hotel, including, but not limited to, using the cost of the airport shuttle to the hotel, the amount of a cab fare
to the hotel, or the IRS mileage rate for the number of miles from the airport to the hotel. Determining the
fair market value of the ride would be the lobbyist’s decision based on the applicable facts.
AO­L­07­0007
Gift to a Non­Covered
Spouse of a Public Servant – “ Indirect” Gifts & Reporting Requirements.
G. S. 138A­32(
c) & ( d) ; 120C­100(
a)( 12), ­400,
­402,
­403
July 12, 2007
Legal counsel for a lobbyist principal organization (“ the Organization”) requested a formal advisory opinion
on whether the Organization could pay travel and meal expenses for the spouse of a public servant
associated with the spouse’s speaking engagement at an Organization conference and if so whether the
Organization would have to report the value of such expenditures to the Secretary of State’s office. The
spouse is not covered under the State Government Ethics Act, Chapter 138A of the North Carolina General
Statutes (“ N. C. G. S.”).
The Organization has hired a lobbyist and is therefore a lobbyist principal pursuant to N. C. G. S. Chapter
120C, the Lobbying Law. The Organization is hosting a conference. It has invited the spouse of a covered
public servant to be a featured speaker at this conference. As a result, the Organization would like to pay or
reimburse this person’s travel expenses ( possibly including airfare) and meals in conjunction with this
speaking engagement. The Organization will not provide him or her with any honorarium or other monetary
payment.
Under these facts, the Organization may provide, and the spouse may accept, travel and meals in conjunction
with the speaking engagement. As stated above, the Organization is a lobbyist principal. N. C. G. S. § 120C­100
( a) ( 11). As a general rule, lobbyist principals may not give, either directly or indirectly, gifts to
“ designated individuals,” unless an exception applies. N. C. G. S. § 120C­303(
a). Designated individuals
include “ public servants.” N. C. G. S. § 120C­100(
a)( 2). Public servants include a broad group of public
officials. N. C. G. S. § 138A­3
( 30) a. On the other hand, public servants cannot accept gifts from lobbyist
principals unless an exception applies. N. C. G. S. § 138A­32(
c).
Even though several exceptions to the general gift ban may apply in this situation, they do not need to be
discussed as the spouse is not a covered public servant under the ethics or lobbying laws, and neither law
directly extends the general gift ban to spouses. However, the gift ban does apply to indirect as well as direct
gifts. Thus, the Organization and the covered public servant must be mindful of any gifts given to the public
servant’s spouse that a reasonable person would attribute to the covered public servant.
24 At the time this opinion was initially issued, the reporting threshold for 138A­32(
e)( 10) independent
relationship exceptions was from the first penny ($. 01) for lobbyists. However, HB 1111 also amended
120C­402(
b)( 4) to increase the reporting threshold for these reportable expenditures to gifts with a value of
more than ten dollars ($ 10.00). See section 41.( b) of HB 1111, retroactively effective January 1, 2007.
Depending upon the value of the ride in this situation, this may impact the requester’s reporting obligation.
If the value of the ride was $ 10 dollars or less, it would not have to be reported.
N. C. Ethics Commission 18
That is not the case here. Reimbursement of the spouse’s travel expenses and meals involved here cannot
reasonably be construed to benefit the public servant. The greater risk in that regard would likely be tangible
items of significant monetary value or gifts that would benefit the public servant, either solely or along with
his or her spouse.
The much more difficult question has to do with whether this “ gift” to the covered person’s spouse needs to
be reported. No it does not. Independent gifts such as these that are not for the purpose of lobbying,
including “ goodwill lobbying,” do not need to be reported to the Secretary of State’s office pursuant to the
Lobbying Law.
As stated, the Organization is a lobbyist principal and therefore subject to all applicable provisions of the
Lobbying Law, including the obligation to report all “ reportable expenditures made for the purpose of
lobbying.” N. C. G. S. § 120C­400
and Article 4 as a whole. A “ reportable expenditure” includes,
Any advance, contribution, conveyance, deposit, distribution, payment, gift, retainer, fee, salary,
honorarium, reimbursement, loan, pledge, or thing of value greater than ten dollars ($ 10.00) per
designated individual per single calendar day.
N. C. G. S. § 120C­100(
a)( 12). Note that the definition of reportable expenditure encompasses much more than
just “ gifts” and does not say that these things have to be “ for the purpose of lobbying.” More significantly
for present purposes, it also includes any of these “ things of value” that are given, directly or indirectly, to
the designated individual “ or that individual's immediate family member.” So under normal circumstances,
reportable expenditures include gifts to immediate family members.
Section 120C­403
sets out the reporting requirements for lobbyist principals, and includes,
( 1) All reportable expenditures made for the purpose of lobbying [ and]
* * * * *
( 5) All reportable expenditures for gifts given under G. S. 138A­32(
e)( 1) ­(
9) and all gifts
given under G. S. 138A­32(
e)( 10) with a value of more than two hundred dollars ($ 200.00).
N. C. G. S. § 120C­403(
b)( 1) & ( 5). 25 Thus, lobbyist principals must report the vast array of “ reportable
expenditures” listed in § 120C­100(
a)( 12) if they are “ made for the purpose of lobbying,” and comprehensive
reporting in this situation makes perfect sense – virtually anything given for the purpose of lobbying should
be reported. On the other hand, only one part of the spectrum of reportable expenditures must be reported
under subsection ­403(
b)( 5): gifts given under the 138A­32(
e) exceptions.
“ Gifts given under” the 138A­32(
e) exceptions are, by definition, gifts given to certain delineated people
( public servants, legislators, and legislative employees) by certain delineated people ( lobbyists, lobbyist
principals, or “ interested persons” 26 ). Thus, the gifts provisions of 138A­32(
c), ( d), & ( e) do not apply to the
25 This is almost identical to the reporting obligations of lobbyists as set forth in N. C. G. S. § 120C­402,
with
the exception of the $ 200 reporting threshold for § 138A­32(
e)( 10) gifts given by lobbyist principals.
26 Section 138A­32(
d) prohibits public servants from accepting gifts from persons whom the public servant
knows or has reason to know ( 1) are doing or seeking to do business with the public servant’s employing
entity; ( 2) are engaged in activities that are regulated or controlled by the public servant’s employing entity;
or ( 3) have financial interests that may be substantially and materially affected by performance of the public
N. C. Ethics Commission 19
giving of gifts to spouses or other family members, unless an indirect gift to the designated individual is
implicated. See discussion above.
In this case, any gifts to the non­covered
spouse are in his/ her own right, and he/ she is not a covered person
under the Ethics Law. As stated above, reimbursement of the travel expenses and meals involved here
cannot reasonably be construed to benefit the covered public servant. Nor would a reasonable person
conclude that the gift was for the purpose of lobbying. Consequently, the Organization does not need to
report these items to the Secretary of State’s office pursuant to N. C. G. S. § 120C­403.
27
In conclusion, the Organization may provide, and the non­covered
spouse may accept, travel and meals in
conjunction with the speaking engagement, and the Organization does not have to report the value of these
gifts to the Secretary of State’s office.
AO­L­07­0008
Lobbyists Contributing to a Political Action Committee (“ PAC”).
G. S. 120C­302
May 25, 2007
A member of a Political Action Committee (“ PAC”) asked whether lobbyists could continue to make
contributions to the PAC in light of the new State Government Ethics Act ( Chapter 138A) and the Lobbying
Law ( Chapter 120C). The Lobbying Law controls the present question.
The PAC was formed by individuals with a particular interest in certain public policy issues in North
Carolina. Those same individuals contribute to the PAC from time to time. The PAC intends to make
financial contributions to candidates for elected office from time to time and to other entities who may
lawfully accept contributions from a State PAC. The decisions as to when and to whom such contributions
may be made will not be directed or controlled by any individual. Instead, all of those who have contributed
to the PAC will be entitled and encouraged to participate in such decisions, and such contributions will be
made based on the will of these contributors. Other than making contributions to candidates or their
committees, the PAC is not and shall not be directly affiliated with any candidate, nor shall it be controlled
by or directed by any candidate. Further, the PAC specifically is not and will not be directed or controlled
by any lobbyists except to the extent that such lobbyists may be entitled as contributors to have their
preferences considered like any other contributor to the PAC.
Pursuant to N. C. G. S. § 120C­302(
a) of the new Lobbying Law, no lobbyist may make a contribution as
defined in N. C. G. S. § 163­278.6
to a candidate who is a legislator or a member of the Council of State or to
that candidate’s campaign committee as defined under N. C. G. S. § 163­278.38Z.
The definition of legislator
and Council of State member under Chapter 120C also includes individuals who have filed a notice of
candidacy or a petition requesting to be a candidate for such office with the Board of Elections or has been
certified as a nominee of a political party for a vacancy, or otherwise qualified as a candidate in a manner
servant’s official duties. Commission staff calls these people “ interested persons,” but that is not a statutory
term.
27 It should be noted that this is a very fact­specific
determination. It involves a non­covered
person
receiving gifts that are not for the purpose of lobbying ( including “ goodwill lobbying”) and which cannot be
deemed an indirect gift to the covered­person
spouse.
N. C. Ethics Commission 20
authorized by law. N. C. G. S. § 120C­104.
Contribution is broadly defined under N. C. G. S. § 163­278.6
to
include, among other things, any conveyance, deposit, distribution, transfer of funds, payment, gift, pledge
or subscription of money, or anything of value whatsoever. Under N. C. G. S. § 120C­302(
a), a candidate’s
campaign committee means any political committee or political action committee organized by, or under the
direction or control of, the candidate.
There is no prohibition on lobbyists giving contributions to political committees or political action
committees that are not organized by or under the direction or control of the candidate as long as the lobbyist
does not specifically earmark his or her contribution to the independent political committee or political
action committee to go to a North Carolina General Assembly legislative candidate or Council of State
candidate.
Under the facts presented, registered lobbyists would be allowed to make contributions to the PAC and such
contributions would not violate the Ethics Act.
The Board of Elections should also be contacted regarding whether such contributions are allowed under the
Board of Elections statutes, policies, and procedures.
AO­L­07­0009
City’s Reception for Local Legislative Delegation – Gifts & Exceptions; “ Public Event” Exception; Local
Government Officials Performing Official Duties Exempt from Lobbying Law.
G. S. 138A­32;
138A­32(
e)( 1) ; 138A­3(
29)
June 7, 2007
A city attorney requested an advisory opinion on several questions, including whether a city in North
Carolina (“ City”) could host and pay for a reception for the City’s legislative delegation and whether certain
City officials, including the Mayor, City Manager, and City Attorney, were exempt from the new Lobbying
Law, Chapter 120C of the North Carolina General Statutes (“ N. C. G. S.”), when acting solely in connection
with their official duties.
The City, a municipal corporation, through its elected Mayor, appointed City Manager, and appointed City
Attorney, wants to host and pay for a reception for the City’s municipal legislative delegation. There are no
outside sponsors funding this event. It is anticipated that as to covered persons under the State Government
Ethics Act ( Chapter 138A) and the Lobbying Law ( Chapter 120C), only legislators would be invited.
Beverages and light food would be provided for immediate consumption. Participation of the Mayor, City
Manager, and City Attorney would be solely in connection with their public duties, and each is a duly
elected or appointed official. The City has not hired an outside lobbyist, does not have an internal lobbyist
on staff, and is not a registered lobbyist principal under the Lobbying Law.
Based upon these facts, the City may host its legislative reception, and its duly elected or appointed officials
and employees ( including the Mayor, City Manager, and City Attorney) are exempt from the requirements of
the Lobbying Law, except for certain limited reporting requirements set out in Article 8 of Chapter 120C. 28
28 If a designated individual ( e. g., a legislator) accepts a reportable expenditure made for the purpose of
lobbying, with a total value of over two hundred dollars per calendar quarter, from a “ person” exempted or
not otherwise covered by Chapter 120C, the “ person” making the reportable expenditure must report it to the
N. C. Ethics Commission 21
Legislative Reception
Unless a specific exception applies, lobbyists, lobbyist principals, and liaison personnel cannot give gifts to
legislators, and legislators cannot accept them. N. C. G. S. § 120C­303
& § 138A­32.
29 The City is neither a
lobbyist nor a lobbyist principal, and there are no lobbyist/ lobbyist principal sponsors of this event.
Likewise, local units of government are exempt from the liaison personnel requirement of Article 5 of the
Lobbying Law. N. C. G. S. 120C­500(
a). Therefore, the gifts restrictions of § 120C­303
& § 138A­32
do not
apply in this situation, and the City may give, and legislators may accept, food and drinks at the planned
legislative reception.
As a result of the foregoing, the City does not need to rely upon the food and beverages for immediate
consumption at a “ public event” exception of N. C. G. S. § 138A­32(
e)( 1) and § 138A­3(
29). If so, the
exception would apply to an organized gathering to which a municipal legislative delegation is invited
provided the other requirements of § 138A­3(
29) a. 2 are met, one of which is that at least 10 individuals
associated with the “ person” ( here, the City) actually attend the event. Another possible § 138A­3(
29) a. 2
exception is if the entire municipal legislative delegation is invited and “ the person is a governmental body
and the gathering is subject to the open meetings law.” N. C. G. S. § 138A­3(
29) a. 2. III. Again, the City does
not need to rely upon these exceptions for the reasons discussed above.
Local Government Officials Performing Official Duties
In addition, the Mayor, City Manager, and City Attorney’s participation would solely be in connection with
their public duties, and each is a duly elected or appointed official. These municipal officials fall under the
general exemption of N. C. G. S. § 120C­700(
3).
Except as otherwise provided in Article 8 of the Lobbying Law ( miscellaneous reporting provisions for
persons exempt or not otherwise covered by the Law), the provisions of Chapter 120C shall not be construed
to apply to,
A duly elected or appointed official or employee of … a county, municipality, school district, or
other governmental agency, when appearing solely in connection with matters pertaining to the office
and public duties….
N. C. G. S. § 120C­700(
3).
The first question then is whether the City’s Mayor, Manager, and Attorney are “ duly elected or appointed
officials or employees.” The Mayor is obviously duly elected and covered by this provision. The City
Manager and City Attorney are duly appointed by the city council. See, e. g., N. C. G. S. § 160A­147
( appointment of city manager) ; § 160A­173
( appointment of city attorney) ; see also § 153A­114
( appointment
of county attorneys). Both city and county managers and attorneys are “ officials” for purposes of this
provision of the Ethics Act. See, e. g., § 128­1.2.
This would include both “ in­house”
attorneys ( those hired
Secretary of State’s office. See N. C. G. S. § 120C­800(
a). Other requirements apply for out­of­state
reportable
expenditures.
29 Again, only legislators will be invited to the reception ­­no
“ public servants” as defined in the Ethics Act.
See N. C. G. S. § 138A­3(
30). [ Note: This opinion was issued prior to the passage of House Bill 1111 ( Session
Law 2007­348)
which amended the definition of “ person” to expressly exclude political subdivisions of the
State, among others. HB 1111, section 23, amending 138­3(
27).
N. C. Ethics Commission 22
by the City as employees) and any outside counsel hired as an independent contractor, as long as all other
requirements of this provision are met ( see below). 30
The second requirement is that these officials and employees must be appearing “ solely in connection with
matters pertaining to the office and public duties” ( emphasis added). Thus, if local government officials or
employees engage in independent lobbying activities not associated with or connected to their public office
and duties, they may fall within the coverage of the Lobbying Law and be required to register, report, and
fulfill all other necessary requirements of Chapter 120C.
Thus, the § 120C­700(
3) exemption applies to the City Mayor, City Manager, and City Attorney, as well as
any other similarly­situated
elected or appointed local government officials. As a general matter, local
elected and appointed officials and employees are exempted from most provisions of the Lobbying Law as
long as they are performing their official duties, and subject to the possible reporting requirements
mentioned above.
AO­L­07­0010
Lobbyists’ and Lobbyist Principals’ Sponsorship of Events Held In Conjunction With Legislative
Conferences; “ Public Event” Gift Ban Exception.
G. S. 138A­32(
e)( 1) ; 138A­3(
29)
November 28, 2007
A lobbyist for a lobbyist principal requested an opinion regarding one or more lobbyist principals and/ or
lobbyists sponsoring events at which food and beverages would be provided to legislators and legislative
employees. Usually these events occur in conjunction with legislative conferences that the legislators are
attending, but they are not actually part of the formal agendas of these conferences.
In the past, the requester lobbyist principal has handled all of the arrangements for these events. In
particular, it has made the reservations and paid for the meals and beverages and then sought reimbursement
or contributions from other entities, many of which are lobbyist principals, which wish to participate in the
funding of these events. The initial request asked about application of the new Lobbying Law ( Chapter
120C) to three separate events being held in conjunction with three separate legislative conferences.
More specifically, the requester lobbyist principal and at least 20 other sponsors planned to host each of the
specific events. There would be more than 20 individuals associated with the group of sponsoring lobbyist
principals and lobbyists in attendance at each separate event. All members of the North Carolina General
Assembly and at least 10 legislative employees were being invited to each of these events. The requester
lobbyist principal and the other hosting sponsors planned to only give food and beverages for immediate
consumption to all of the legislators and legislative employees who attended the events.
The new Lobbying Law applies to lobbyists, lobbyist principals, and legislative liaison personnel and
generally prohibits them from giving “ gifts,” directly or indirectly, to designated individuals ( legislators,
legislative employees, and public servants), unless an exception applies. The new State Government Ethics
30 While not at issue in this opinion, this same analysis would likely apply to the other types of local
government employees and officials listed in § 128­1.2:
acting city and county managers, interim city and
county managers, finance officers, clerks, and deputy clerks. This is not an exclusive list.
N. C. Ethics Commission 23
Act prohibits the same designated individuals from knowingly accepting a “ gift,” directly or indirectly, from
a lobbyist, lobbyist principal, or legislative liaison personnel, unless an exception applies. N. C. G. S. § 138A­32(
c). Both laws use the same gift ban exceptions, which are listed in N. C. G. S. § 138A­32(
e).
Because the requester here and many of the other sponsors of these events are lobbyists or lobbyist
principals, for these companies and individuals to be able to participate in the funding of the events in
question, including providing free meals and beverages to legislators and legislative employees, a gift ban
exception under N. C. G. S. § 138A­32(
e) must be met.
Based on the facts presented here, there is an applicable gift ban exception that would allow the requesting
lobbyist principal and the other lobbyist/ lobbyist principal sponsors to give food and beverages to the
legislators and legislative employees at these specific events. N. C. G. S. § 138A­32(
e)( 1) allows lobbyists
and lobbyist principals to give food and beverages for immediate consumption at a “ public event.” Public
event is defined in N. C. G. S. § 138A­3(
29). Prior to the passage of House Bill 1111 ( Session Law 2007­348)
on August 9, 2007, the definition of “ public event” had two separate subsections, one for legislators and
legislative employees, and another for public servants. If both legislators and public servants were invited to
a prospective public event, all requirements of both subsections had to be met in order satisfy this exception,
including who must be invited to the organized gathering. 31 N. C. G. S. § 138A­3(
29) a. 1 applied to events
which were open to the general public. The events in question here are not open to the general public;
therefore, N. C. G. S. § 138A­3(
29) a. 1 was not applicable.
However, these three specific events met the definition of “ public event” for legislators under N. C. G. S. §
138A­3(
29) a. 2. N. C. G. S. § 138A­3(
29) a. 2 had a two­pronged
test. 32 The first prong is that the “ person”
sponsoring the event must invite either the entire membership of the House of Representatives or of the
Senate, or the entire membership of one of the statutorily­listed
legislative subgroups. Since the entire
General Assembly was invited, the first prong of N. C. G. S. § 138A­3(
29) a. 2 was met.
Commission staff has determined that invitations under the Ethics Act and the Lobbying Law must be in
writing ( e­mails
are included as a written invitation), be sent out at least ten ( 10) days in advance of the
event, state the date, time and location of the event, identify the event, and list the names of the sponsors of
the event. Thus, the sponsoring lobbyist principals and lobbyists must be identified and known prior to the
event occurring.
31 Section 24 of House Bill 1111 ( Session Law 2007­348)
amended the definition of “ public event” under
N. C. G. S. § 138A­3(
29) and eliminated the two separate subsections ( one for legislators/ legislative
employees and one for public servants). Pursuant to the new legislative changes, there are now five
definitions of “ public event” under N. C. G. S. § 138A­3(
29), and if the sponsoring person and their/ its event
meet all of the requirements of any one of these five definitions, the event is a public event for all covered
attendees ( legislators, legislative employees, and public servants). Thus it is no longer necessary to meet
both sets of requirements.
32 The amended definition of “ public event” ( section 24 of HB 1111) renumbered § 138A­3(
29) a. 2 as §
138A­3(
29) b. The two­pronged
test contained in § 138A­3(
29) a. 2 remains under new § 138A­3(
29) b.
N. C. Ethics Commission 24
After meeting this first invitation prong, a second prong must also be met. This second prong of N. C. G. S. §
138A­3(
29) a. 2 33 can be met in three ways, depending upon who/ what is determined to be the “ person”
holding the organized gathering. The three ways are as follows:
( I) at least 10 individuals associated with the person actually attend, other than the legislator or
their immediate family; or
( II) all shareholders, employees, board members, officers, members, or subscribers of the person located
in North Carolina are notified and invited to attend; or
( III) the person is a governmental body and the gathering is subject to the open meetings law.
Under Chapter 138A, “ person” is broadly defined to include an individual, any business entity, committee,
association, or any “ group of persons acting together.” N. C. G. S. § 138A­3(
27). The requesting lobbyist
principal here and the other hosting lobbyists and lobbyist principals were acting as a group when
sponsoring each of these events.
As stated above, one of the ways to meet the second prong of § 138A­3(
29) a. 2 is for at least 10 individuals
associated with the “ person” ( here the lobbyists and lobbyist principals sponsoring the particular event) to
actually attend that event. The initial request stated that more than 20 individuals associated with the group
of lobbyists and lobbyist principals ( the “ person”) sponsoring each particular event would actually attend
each event.
The determination of who/ what is the “ person” holding the organized gathering becomes more complicated
when the event is being sponsored/ funded by a number of lobbyist principals and lobbyists, rather than just
one. The Commission has decided that for the purposes of meeting subsection I of § 138A­3(
29) a. 2, 34 the
“ person” referenced in subsection I is the “ group” of lobbyists and lobbyist principals sponsoring the event
(“ group of persons acting together”).
Therefore, for the events in question here, each sponsoring lobbyist and lobbyist principal did not have to
have 10 individuals associated with them individually actually attend the event to meet subsection I. Rather,
the group of lobbyists and lobbyist principals sponsoring each event was the “ person” and, therefore, the
group only had to have a total of 10 individuals associated with the group of sponsoring lobbyists and
lobbyist principals actually attend the event in question. 35
33 N. C. G. S. § 138A­3(
29) a. 2 is now § 138A­3(
29) b.
34 Subsection I of N. C. G. S. § 138A­3(
29) a. 2 is now renumbered as subsection 1 of § 138A­3(
29) b.
35 For example, if five lobbyist principals co­sponsor
an event, each sponsoring lobbyist or lobbyist principal
can have two people actually attend the event for a total of 10 attendees. Alternatively, all 10 actual
attendees could be associated with just one of the sponsoring lobbyists or lobbyist principals. Any other
combination of numbers from the group of sponsoring lobbyists and lobbyist principals ( the “ person”) would
also suffice as long as at least 10 individuals associated with the group of sponsoring lobbyists and lobbyist
principals actually attend the particular event.
N. C. Ethics Commission 25
Based upon the particular facts presented here, the second prong of § 138A­3(
29) a. 2 was met, as long as the
sponsoring lobbyists and lobbyist principals were identified prior to the particular event being held. 36 This is
necessary to establish that at least 10 individuals associated with the “ person” ( the group of sponsoring
lobbyists and lobbyist principals) hosting a particular event actually attend that event. Therefore, the
requesting lobbyist principal here and the other lobbyists and lobbyist principals co­sponsoring
each of the
events in question could give legislators and legislative employees food and beverages for immediate
consumption at these events under the “ public event” gift ban exception of § 138A­32(
e)( 1). 37
All of the events in question were for the purpose of lobbying. 38 This made the entire cost of each event a
reportable expenditure for the purpose of lobbying. Therefore, the entire cost of each event needed to be
reported to the Secretary of State’s Office. Each sponsoring lobbyist and lobbyist principal was required to
report the total amount that they gave to sponsor each event and also determine the fair market value of the
food and beverages gift given to the legislators and their immediate family member( s). The food and
beverages provided to each legislator and their immediate family members were § 138A­32(
e)( 1) gifts that
needed to be reported if the fair market value exceeded $ 10.00 per calendar day per legislator or immediate
family member. N. C. G. S. § 120C­402(
b)( 4) and § 403( b)( 5). The food and beverage component needed to
be reported on a per­legislator
basis with the receiving family member( s) listed separately. N. C. G. S. §
120C­401(
b). The remaining amount of a sponsor’s sponsorship money needed to be reported under the
proper category of reportable expenditures per N. C. G. S. § 120C­401(
c).
36 Note that if the sponsoring lobbyist principals cannot meet subsection I, then they must meet subsection II
of N. C. G. S. § 138A­3(
29) a. 2. The “ group” analysis used above for subsection I cannot be used by the
sponsoring lobbyist principals here to meet subsection II of § 138A­3(
29) a. 2, based upon the language of
subsection II and the fact that this group of sponsoring lobbyist principals consists of separate entities with
separate shareholders, employees, officers, etc. Accordingly, to meet the second prong of § 138A­3(
29) a. 2
through subsection II, each sponsoring lobbyist principal would need to notify and invite all of their
shareholders, employees, board members, officers, members or subscribers located in North Carolina.
Pursuant to section 24 of HB 1111, subsection II of § 138a­3(
29) a. 2 has been renumbered as subsection 2 of
§ 138A­3(
29) b.
37 Note that section 38 of HB 1111 amended G. S. 138A­32(
e)( 3) so that as of October 1, 2007, the 138A­32(
e)( 3)( iii) gift ban exception applies to reasonable and actual expenditures for food, beverages,
transportation, and incidental entertainment provided to a legislator or legislative employee either as part of
the meeting of a non­partisan
state, regional, national or international legislative organization of which the
General Assembly, the legislator, or the legislative employee is a member or at an event held in conjunction
with a meeting of such a non­partisan
state, regional, national or international legislative organization if all
of the other requirements and conditions contained in 138A­32(
e)( 3) are met.
38 Under N. C. G. S. § 120C, the definition of “ lobbying” includes both “ direct” lobbying and “ goodwill”
lobbying. Direct lobbying is influencing or attempting to influence legislative or executive action, or both,
through direct communication or activities with a designated individual or that person’s immediate family.
N. C. G. S. § 120C­100(
a)( 9) a. Goodwill lobbying is the developing of goodwill through communications or
activities, including the building of relationships, with a designated individual or that person’s immediate
family with the intention of influencing current or future legislative or executive action, or both. N. C. G. S. §
120C­100(
a)( 9) b.
N. C. Ethics Commission 26
AO­L­07­0011
Members of State Board Lobbying Members of Congress; “ Liaison Personnel.”
G. S. 120C­500(
a), ( b), and ( c)
October 3, 2007
A Licensing Board (“ the Board”) asked whether, pursuant to the new Lobbying Law ( Chapter 120C) and the
new State Government Ethics Act ( Chapter 138A), its members could lobby North Carolina members of the
United States Congress and members of the North Carolina General Assembly. Specifically, Board members
inquired whether they could lobby North Carolina members of the United States Congress with regard to
issues related to their Board and its professional organization.
Both the Ethics Act and the Lobbying Law apply to North Carolina legislators who are members of, or
candidates for, the North Carolina General Assembly. N. C. G. S. § § 138A­3(
22) and 120C­104.
The Ethics
Act and the Lobbying Law do not apply to North Carolina members of the United States Congress.
Accordingly, any requirements or prohibitions under these state laws do not pertain to lobbying members of
the United States Congress. Therefore, unless prohibited by federal or other law, the Board’s members may
lobby North Carolina members of the United States Congress.
Since the Board is a state board with non­advisory
authority, it and all of its voting members ( including ex­officio
members) are covered under the Ethics Act and the Lobby Law. Accordingly, the requirements and
prohibitions of these laws do apply when the Board wants to lobby members of the North Carolina General
Assembly. Prior to August 9, 2007, the Lobbying Law required all covered state boards to designate at least
one, but not more than two, liaison personnel to conduct the board’s lobbying of members of the North
Carolina General Assembly for legislative action. N. C. G. S. § 120C­500(
a) and ( c). As of August 9, 2007,
if a state board does not have staff, it does not have to designate liaison personnel to lobby for legislative
action. 39 However, if the board designates liaison personnel, the designated liaison personnel must register
and report with the Secretary of State’s Office pursuant to N. C. G. S. § 120C­402
and comply with the
sections of the Ethics Act and Lobby Law that are applicable to liaison personnel. See N. C. G. S. § 120C­501(
b), ­(
c), ­(
d), and ­(
e).
In addition, prior to the signing of House Bill 1110 on August 9, 2007, no state funds could be used by
covered state boards, to contract with persons who were not State employees to lobby legislators or
legislative employees. N. C. G. S. § 120C­500(
b). 40 Section 6.( a) of HB 1110 amended § 120C­500(
b) to
allow state funds to be used to pay counsel employed under N. C. G. S. § 147­17
to lobby legislators and
legislative employees for legislative action.
39 See Section 6.( a) of House Bill 1110 ( Session Law 2007­347).
40 See Section 6.( a) of House Bill 1110 and N. C. G. S. § 147­17.
Section 147­17
provides for the employment
of legal counsel by State departments, agencies, etc., under certain circumstances.
N. C. Ethics Commission 27
AO­L­07­0012
International Study Trip & the “ Educational Meeting” Gift Ban Exception.
G. S. 120C­303(
a) and ( b), and 138A­32(
e)( 3)
October 29, 2007
A lobbyist principal organization and a non­lobbyist
principal organization inquired whether they could pay
various travel and related expenses for certain legislators and public servants, considered to be
“ policymakers” in areas related to the trip, to participate in an international study. Specific questions
included ( 1) whether the organizations’ international study trip qualified as an “ educational meeting” under
the State Government Ethics Act ( Chapter 138A) and the Lobbying Law ( Chapter 120C) and ( 2) whether the
organizations are allowed to pay the travel­related
expenses of this international study trip, which includes
travel, lodging, and food expenses, and other incidental expenses of nominal value connected to this trip, for
these legislators and public servants.
I. Overview of the Facts
One sponsoring organization is a lobbyist principal. The other is not. All of the money for this international
study trip, including the money for the travel­related
costs of the invited legislators and public servants
determined to be “ policymakers,” is given to the lobbyist principal organization in the form of grants from
two different private philanthropic foundations, neither of which is a lobbyist principal. The money is given
by these two private foundations to be used for this international study trip with no conditions or
requirements attached. The two foundations have no involvement in the planning, administration, or
coordination of the trip. The two foundations make no decisions regarding the trip and have no input as to
the selection of the participants.
The two sponsoring organizations plan, administer and coordinate the entire trip. They determine and select
the individuals who will be invited to participate in this trip and only pay for the travel­related
costs of the
participants who have been determined to be “ policymakers.” The other invited participants must pay for
their own travel­related
costs of this trip. The only invited participants who have been determined to be
“ policymakers” are North Carolina legislators and public servants as defined under N. C. G. S. § 138A­3(
30).
Legislators and these public servants are “ designated individuals” under the Lobbying Law. N. C. G. S. §
120C­100(
a).
The two sponsoring organizations have sponsored previous international study trips, and the participants for
all of these previous trips have been invited based on their positions, both public and private. The
participants for the current trip are also being invited based on their positions. Accordingly, many of the
participants being invited on this trip have been on previous international trips sponsored by these
organizations. The “ policymakers” identified and invited on this trip consist of both legislators and public
servants.
The purposes of this international trip are to study another country’s governmental institutions and systems,
with an emphasis on examining particular areas, including math and science, and to examine how the
country has merged its governmental institutions and systems with the economic development of the
country, and the benefits of such merger. This study and examination will be conducted and accomplished
by visiting governmental institutions and systems, and private businesses and companies; and meeting and
discussing with leaders and employees of governmental institutions and systems, business and company
representatives, and members of the general public who use these governmental institutions and systems
and/ or who may be affected by these governmental institutions and systems merging and integrating with the
N. C. Ethics Commission 28
economic development of the country. This study process will also include examining the country’s
approach to identifying leaders in particular areas of its governmental institutions and systems, and the
methods it uses to teach and train these identified leaders. The destination was chosen as the subject of this
trip for five major reasons:
( 1) its educated population are top performers in math and science;
( 2) it is a world leader in using technology as an educational and economic tool;
( 3) its governmental institutions and entities succeed with very diverse populations;
( 4) it has a “ grow your own leadership” approach; and
( 5) it considers education a foundation block in building stronger governmental institutions, entities,
and businesses, and has an integrated approach to planning for education and economic
development.
The itinerary for this international study trip, excluding travel time to and from the ultimate destination,
spans six days. These six days consist of 73.5 hours of non­sleeping
time. Of these 73.5 hours, 40.5 hours
are scheduled for educational time, 6.5 hours of travel time from one educational event to another and back
to the hotel, and 26.5 hours for non­educational
time, such as free time, cultural site visits, museum visits
and tours. All of the participants, including the approximately 20 paying participants, may elect to stay the
final weekend of the trip. However, if any of the legislators, public servants, or any other participant who
may be covered under the Lobbying Law elects to remain in the destination city after the international study
trip has formally concluded, they will be responsible for all of their own expenses, including hotel, food,
transportation, entertainment and any other expenses they may incur prior to returning to North Carolina.
II. Applicable Law
The Lobbying Law applies to lobbyists, lobbyist principals, and legislative liaison personnel, as these terms
are defined in Chapter 120C. The Lobbying Law prohibits, among other things, a lobbyist, lobbyist
principal, or legislative liaison personnel from giving gifts ( including anything of monetary value), directly
or indirectly, to a designated individual ( legislators, legislative employees, and public servants) unless an
exception to the general gift ban applies. See N. C. G. S. § 138A­32(
e) for a list of the exceptions. Because one
of the sponsoring organizations is a lobbyist principal, for it to be able to pay for the travel­related
expenses
of this international study trip for legislators or public servants, a gift ban exception under N. C. G. S. § 138A­32(
e) must be met. The other sponsoring organization is not a lobbyist principal; therefore, the gift ban
contained in N. C. G. S. § 120C­303
is not applicable and the non­lobbyist
principal sponsoring organization
may give gifts to designated individuals, including legislators and public servants.
N. C. G. S. § 138A­32(
e)( 3)( i) permits a lobbyist principal to pay for the “ reasonable actual expenditures” of a
public servant, legislator, or legislative employee incurred in connection with the individual’s attendance at
an educational meeting “ for purposes primarily related to the public duties and responsibilities of the
covered person ….” Any food, beverages, transportation, or entertainment must be provided to all attendees
or defined groups of 10 or more attendees, and the meeting must ( a) be attended by at least 10 or more
participants; ( b) have a formal agenda; and ( c) be noticed at least 10 days in advance. Any entertainment
provided at the meeting “ must be incidental to the principal agenda of the meeting.” The educational
meeting exception allows a public servant, legislator, or legislative employee to accept “ reasonable actual
expenditures” for food, beverages, registration, travel, lodging, other incidental items of nominal value, and
incidental entertainment in connection with their attendance at the educational meeting.
N. C. G. S. § 120C­403(
b)( 5) requires each lobbyist principal to report, among other things, all reportable
expenditures made for the purpose of lobbying, all reportable expenditures for gifts given under any of the
N. C. Ethics Commission 29
gift ban exceptions of N. C. G. S. § 138A­32(
e) ( 1) – ( 9), ­(
e)( 11), ­(
e)( 12), 41 and all gifts given under the gift
ban exception of N. C. G. S. § 138A­32(
e)( 10) with a value of more than $ 200. The lobbyist principal reports
are to be filed with the Secretary of State’s Office quarterly when the General Assembly (“ GA”) is not in
session and monthly when the GA is in session. N. C. G. S. § 120C­403(
a) and ( c).
Accordingly, a sponsor that is a lobbyist principal and that is providing a gift allowed under the gift ban
exception of N. C. G. S. § 138A­32(
e)( 3) is required to report on its lobbyist principal report “ reasonable
actual expenditures” for food, beverages, registration, travel, lodging, other incidental items of nominal
value, and incidental entertainment in connection with the designated individuals’ attendance at the
educational meeting if the value of the expenditures is greater than $ 10 per day per individual legislator,
individual public servant, or that individual’s immediate family. N. C. G. S. § 120C­403(
b)( 5) and § 120C­100(
a)( 12) a.
A sponsor that is not a lobbyist principal and that is providing a gift allowed under the gift ban exception of
N. C. G. S. § 138A­32(
e)( 3) is required to report reportable expenditures made for the purpose of lobbying,
including gifts, if ( 1) the reportable expenditures given per individual legislator, individual public servant or
that person’s immediate family equal a total cumulative value of over $ 200 in a calendar quarter; ( 2) the
sponsor is located in North Carolina or the designated individual is in North Carolina when he/ she receives
the reportable expenditures; and ( 3) the reportable expenditures are not excluded from Article 8 of Chapter
120C by subsection ( e) of N. C. G. S. § 120C­800.
See N. C. G. S. § 120C��800.
III. Application of the Commission’s Educational Meeting Criteria
The Ethics Commission has adopted seven non­exclusive
criteria to be applied when determining what
constitutes an “ educational meeting” under N. C. G. S. § 138A­32(
e)( 3)( i) (“ Educational Meeting Criteria” or
“ Criteria”). 42 These Criteria are for guidance purposes only, and no one factor is controlling. The
determination as to whether a particular meeting, conference, or event is an “ educational meeting” under
N. C. G. S. § 138A­32(
e)( 3)( i) is for the Commission to determine based upon the specific facts presented
regarding the event. The Commission’s application of these Criteria to the international study trip presently
under consideration follows. 43
A. What is the meeting’s primary purpose? Is the primary purpose to influence or curry favor with a
public servant, legislator, or legislative employee with respect to executive or legislative action? Or, is the
meeting primarily intended to present information to enhance a person’s understanding of a subject matter or
for the purpose of self­improvement?
41 House Bill 1111 ( Session Law 2007­348)
added two new gift ban exceptions: 138A­32(
e)( 11) and ­(
12).
See Section 41 of HB 1111. These new gift ban exceptions are retroactive to January 1, 2007. See Section
44 of HB 1111.
42 [ Note: See AO­L­07­0001
and AO­L­07­0003
and Attachment A thereto.]
43 Because the participating legislators and public servants were only invited because they were
“ policymakers” in the relevant areas, the educational content of the meeting related to their specific duties
and responsibilities and satisfied the first educational meeting test: Is the educational content of the meeting
related to a specific public duty or responsibility of the public servant, legislator, or legislative employee?
See “ Criteria for Determining an ‘ Educational Meeting’ Under § 138A( e)( 3)( i).” Consequently, this opinion
begins with the “ primary purpose” analysis.
N. C. Ethics Commission 30
Meetings intended to influence rather than educate may include meetings that are directly related to an
upcoming official vote, recommendation, or other legislative or executive action. In determining the purpose
of the meeting, the Commission will consider whether the entity holding the meeting
· has legislation pending before the General Assembly or intends to request legislative action;
· is seeking to introduce legislation or impact executive action at the time of the meeting;
· will be impacted by upcoming actions or decisions of the public servant, legislator, or legislative
employee; or
· is holding the meeting for the purpose of advocating on behalf of legislative or executive action.
The lobbyist principal sponsoring organization here proposed several legislative initiatives during the 2007
General Assembly session. One included an education­related
pilot project that the organization had drafted
and resulted in both funding and operating responsibility for the organization. Another sought funding for a
program the organization administers. Thus, although the international study trip’s primary purpose is not to
influence legislative or executive action, or to advocate on behalf of legislative or executive action, the
organization’s position and priorities on both legislative and executive issues and actions are likely to be
discussed during the international study trip. So the trip appears to have a dual purpose: both to educate and
influence those participants whom the sponsoring organization considers key “ policymakers.”
B. What is the nature of the entity holding the meeting?
· Is the entity a State agency or governmental entity?
· Is the entity an educational institution?
· Is the entity an organization that routinely sponsors meetings with educational content?
· Is the entity holding the meeting a lobbyist principal?
The lobbyist principal is a North Carolina corporation with its membership consisting of elected officials,
both in the legislative and executive branches of North Carolina government, and others who also have the
power to affect and make public policy regarding particular issues and areas. The non­lobbyist
principal is
an entity of the state with 501( c)( 3) status when applying for grants. The non­lobbyist
principal does not
have a lobbyist and is not a lobbyist principal. Accordingly, the gift ban does not apply to the non­lobbyist
principal.
C. Is the lobbyist principal which is paying for the person’s attendance at the meeting also
sponsoring the meeting?
The lobbyist principal, along with the non­lobbyist
principal, is sponsoring the international study trip, but
only the lobbyist principal is paying for the travel­related
costs, including airfare and other necessary
transportation, lodging, meals, and other incidental items of nominal value connected to the study trip, of the
participants that it considers “ policymakers,” which are legislators and public servants. Note that the
lobbyist principal is not paying the travel­related
costs of the participants that it does not consider
“ policymakers.” These participants will pay a “ registration fee” which will cover their airfare, other
transportation, lodging, meals, and other incidental items of nominal value connected to the study trip.
N. C. Ethics Commission 31
D. What is the agenda for the meeting?
· Other than the speech or roundtable discussion in which the public servant, legislator, or
legislative employee is participating, what proportion of the individual events scheduled at the
meeting have a speaker, roundtable discussion, or other educational content?
· What proportion of those sessions is held in the absence of a meal or entertainment?
· What proportion of the meeting agenda includes meals or entertainment with formal educational
content?
· Does the agenda cover a wide range of topics or have a very limited, industry or client­specific
focus?
· Would the meeting take place regardless of whether the invited designated individual( s) attends?
· Who are the speakers?
· Are they associated with the lobbyist principal or its lobbyist?
· Are they independent experts in their field?
The “ meeting” here is a six­day
international study trip consisting of approximately 12­to
13­hour
days,
including educational time, personal time, lunch, dinner, and travel time. The itinerary includes time spent
on the purposes and goals of the study trip, travel to and from the various governmental entities, institutions,
and systems, private businesses and companies, and other necessary locations, and personal time for the
participants. The educational time includes: presentations on the history and culture of the country they are
studying; a political overview of the country; the relationship of the governmental entities, institutions and
systems with the country’s economic policies; visits to various governmental entities, institutions, and
systems with accompanying presentations, tours, discussions, and observation time; visits to various
companies and businesses with accompanying presentations and discussion with management and
employees; discussions with business professionals, educators, and members of the general public who use
and/ or may be affected by these governmental entities, institutions, and systems, and the merger and
integration of such with private businesses and companies for the economic development of the country. The
personal participant time includes guided tours of the country, optional cultural activities and visits, and
overall free time. Breakfast, lunch and dinner are included every day. The speakers are not associated with
the lobbyist principal and many may be deemed experts in their fields, whether that is in governmental
issues, public policy issues, education, business, economics or the link and interconnection of the country’s
governmental public policy issues and the economics of the country. A focus of the lobbyist principal is to
have legislators and public servant policymakers participate in this trip, and that is why the lobbyist principal
pays for the trip­related
costs and expenses of these “ policymakers.” The lobbyist principal has
acknowledged that this international study trip probably would not take place if these “ policymakers” did not
attend; however, a number of other individuals are expected to participate with each of them paying for the
trip.
E. Is the location of the meeting directly related to the meeting’s educational content?
· Is there a reason for holding the meeting in a location other than where the attendees live or
work?
· Is it necessary to the meeting’s educational purpose that an individual travel in connection with
the meeting?
· Is the meeting sponsored by a state, national, or international organization for the benefit of its
state, national, or international membership?
· Is the location of the meeting otherwise integral to the educational content of the meeting?
N. C. Ethics Commission 32
· Would an individual be capable of obtaining a comparable degree of educational information
through other means that would not require travel?
The lobbyist principal and the non­lobbyist
principal’s international study trip is being held in another
country. This country was selected as the location for this trip for five major reasons, all related to the
country’s governmental institutions and systems, with an emphasis on examining particular areas, including
math and science, and to examine how the country has merged its governmental institutions and systems
with the economic development of the country, and the benefits of such merger. Holding the trip in this
country is necessary for the lobbyist principal and the non­lobbyist
principal to meet the educational goals
they have set for this trip. Being in this country is integral to the educational content of the trip. For
example, the trip includes: visits and tours of this country’s governmental entities, institutions, and systems,
and of private businesses and corporations; meetings and discussions with the leaders and employees of
various governmental entities, institutions and systems of this country, business representatives, and
professionals, experts in various fields, educators, and members of the general public who use and/ or may be
affected by the interaction and integration of these governmental entities, institutions, and systems, and their
public policy issues with private businesses and corporations. An individual would not be capable of
obtaining a comparable degree of educational information through other means.
F. Is the length of the educational meeting reasonably necessary to fulfilling the educational
purpose of the trip?
The international study trip, including travel time to and from the country, will commence Friday and end a
week later on either Saturday or Sunday, depending on what day the participant decides to depart for North
Carolina. The formal itinerary for the trip commences on Sunday and ends the following Friday. The
majority of all of the days, except the travel days and the day they arrive in the country, is spent on
presentations, tours, visits and other activities related to the educational goals and purpose of this trip. The
length of the trip is not unreasonable in relationship to the educational goals and purpose of this trip, and the
travel time necessary due to the distance between North Carolina and the country.
G. What degree of personal benefit does the individual gain from attendance at the meeting?
· Does the personal benefit outweigh the public benefit gained by the educational value of the
meeting?
This “ meeting” involves an out­of­the­country
trip to a country that many people may wish to visit, but
which is not considered a common vacation destination. A majority of every day of this trip is being held in
various settings and locations with educational presentations, tours and discussions. It has significant
educational value. Therefore, the personal benefit in attending this international study trip would not
outweigh the public benefit gained by the educational value.
H. Are there other factors that would support the conclusion that the meeting is educational?
No other factors that would support the conclusion that the meeting is educational were identified.
IV. Conclusion
Based on the facts presented and the forgoing analysis, the Commission determined that the international
study trip satisfies the Commission’s educational meeting criteria and is an educational meeting pursuant to
N. C. Ethics Commission 33
N. C. G. S. § 138A­32(
e)( i). The facts presented also established that ( a) any food, beverages, transportation,
or entertainment that is being provided as part of this trip is being provided to all trip participants; ( b) the trip
has an established formal agenda; and ( c) notice of the trip has already been provided to interested
individuals, including both the paying participants and the “ educational policymaker” participants, thereby
meeting the requirement of at least 10 days advance notice. It is also the Commission’s understanding,
based on the facts that were provided, that any entertainment provided during this trip will be “ incidental to
the principal agenda of the meeting.”
Based on all of the foregoing conditions being met, this international study trip will meet the education gift
ban exception listed under N. C. G. S. § 138A­32(
e)( i) and the lobbyist principal sponsor will be allowed to
pay for the “ reasonable actual expenditures” of the legislators and public servants for food, beverages,
registration, travel, lodging, incidental items of nominal value, and incidental entertainment in connection
with their participation in this international study trip.
The lobbyist principal sponsor will need to report all of the “ reasonable actual expenditures” it pays in
connection with the designated individuals’ participation in this international study trip on its lobbyist
principal report that it files with the Secretary of State’s Office. The lobbyist principal sponsor will need to
report these expenditures on the principal report that it files with the Secretary of State’s Office for the first
quarter of 2008. N. C. G. S. § 120C­403(
a) and ( c).
It is the Commission’s understanding that the non­lobbyist
principal sponsor is not paying for any of the
expenditures of the designated individuals who are participating in this international study trip. Accordingly,
the non­lobbyist
principal sponsor is not giving anything of monetary value to the designated individuals
and, therefore, it has nothing to report.
N. C. Ethics Commission 34
“ ETHICS” OPINIONS – CHAPTER 138A
The Ethics Commission is the final authority for advisory opinions issued to public servants, lobbyists, and
lobbyist principals. For legislators, however, the Commission issues “ recommended advisory opinions”
pursuant to section 138A��13(
b), which the Legislative Ethics Committee then adopts, modifies, or overrules
according to section 120­104(
b). Once the Legislative Ethics Committee finalizes the legislative opinion and
edits it for publication, the Committee submits the final opinion to the Ethics Commission for publication.
The Commission may only publish the Committee’s formal advisory opinions.
Because of the recommendation and publication process for legislative opinions, there will be gaps in the
numbering system for the Commission’s “ ethics” advisory opinions. For example, the first published
“ ethics” advisory opinion is AO­E­07­0005.
AO­E­07­0005
Statement of Economic Interest Disclosure Requirements
G. S. 138A­22
and 138A­24
March 7, 2007
Legal counsel requested a formal advisory opinion concerning the Statement of Economic Interest (“ SEI”)
filing requirements. Responses to the specific questions asked, as numbered by the request, follow.
( 1) Since this advisory opinion is being sent in advance of the SEI filing deadline, the question regarding
whether the requester will be required to file an SEI in the event a response is not received by the SEI
filing deadline is moot.
( 2) G. S. 138A­22(
a) requires that “ public servants” file Statements of Economic Interest, “ except for
public servants included under G. S. 138A­3(
30) b., e., f., or g. whose annual compensation from the
State is less than sixty thousand dollars ($ 60,000)….” An individual that falls within one of the
referenced categories and whose annual compensation is less than $ 60,000, are therefore not subject
to the SEI filing requirements of G. S. Chapter 138A.
( 3) G. S. 138A­24(
a)( 2) f. requires disclosure of “ nonpublicly owned companies” in which a public
servant, spouse, or members of the public servant’s immediate family have financial interests valued
at $ 10,000 or more. G. S. 138A­24(
a)( 2) i. also requires that the individual describe any “ material
business dealings, contracts, or other involvement” which the nonpublicly owned company, or other
companies in which that company owns securities or equity interests over $ 10,000, has with the
State, or if the company is “ regulated by” the State, if known. “ Regulatory relationship” is not
defined in the Act. If business entities are subject to certain routine filing requirements administered
by an agency, that authority, alone, would not constitute a “ regulatory relationship” with the State.
G. S. 138A­24(
a) 2. i. requires a description of the referenced relationships with the State “ if known.”
This would require the exercise of due diligence by reviewing information readily available, not
extensive investigation or research.
N. C. Ethics Commission 35
( 4) What follows is requested guidance on the extent to which certain relationships represent
“ memberships or affiliations” as used in G. S. 138A­24(
a)( 7). 44
· A “ membership” in an alumni association or other organization that the public servant did not
affirmatively join or in which the public servant does not actively participate would probably
not qualify as a “ membership or affiliation.” However, the specific circumstances of that
relationship would have to be provided in order to obtain specific guidance.
· An individual’s current status as a charitable donor may qualify as a “ membership or
affiliation,” but more specific information must be provided before this question can be
answered. However, a charity’s solicitation of donations from an individual would not be
considered a “ membership or affiliation.”
· An individual’s possession of a Harris Teeter VIC membership need not be disclosed in
response to question 14 on the 2007 SEI.
· Generally, an individual’s membership in a trade association with which his or her employing
entity “ may have jurisdiction” should be disclosed in response to question 14. If there are
particular organizations about which individual public servants have questions, they can
contact the Ethics Commission with that information.
If individuals have specific questions concerning whether information should be disclosed on an SEI, they
should contact the Ethics Commission.
AO­E­07­0013
No “ Cooling Off” Period for Legislators Serving as Liaison Personnel
G. S. 120C­100(
a)( 10), ­304,
­501(
a)
October 2, 2007
Legal counsel requested a formal advisory opinion on the question of whether a State legislator is required to
wait six months before serving as a liaison personnel ( also called a legislative liaison) under Chapter 120C
of the North Carolina General Statutes (“ N. C. G. S.”), the Lobbying Law.
The specific question was as follows: under N. C. G. S. § 120C­304,
may a former legislator serve as liaison
personnel ( legislative liaison) for a public entity immediately upon leaving public office? Put differently,
does § 120C­304
require a former legislator to wait six ( 6) months after leaving public office before he or
she may be employed as a legislative liaison?
A former legislator may go to work as a legislative liaison without waiting the six ( 6) months required by
N. C. G. S. § 120C­304(
a). The six­month
" cooling off" period does not apply to such liaison personnel.
As a general rule, legislators or former legislators may not register as lobbyists under Chapter 120C either
( 1) while in office or ( 2) before the later of the close of session as set forth in N. C. G. S. § 120C­44
Section 34 of Session Law 2007­348
( House Bill 1111) amended G. S. 138A­24(
a)( 7), effective August 9,
2007. As amended, G. S. 138A­24(
a)( 7) now requires disclosure of such organizations in which a public
servant or his or her immediate family is a “ director, officer, or governing board member.”
N. C. Ethics Commission 36
100( a)( 4) b. 1 45 or six months after leaving office. N. C. G. S. § 120C­304(
a), as amended by section 13.( a) of
House Bill 1111 ( Session Law 2007­348).
This six­month
waiting period expressly applies to legislators or
former legislators acting as lobbyists and is commonly referred to as a “ cooling off” period.
Recently­enacted
House Bill 1111 ( Session Law 2007­348)
amended the definition of “ lobbyist,” but did not
change the express exclusion from that term for liaison personnel:
The term “ lobbyist” shall not include individuals who are specifically exempted from this Chapter by
G. S. 120C­700
or registered as liaison personnel under Article 5 or this Chapter.
N. C. G. S. § 120C­100(
a)( 10), as amended by sections 8.( a) and 8.( b) of House Bill 1111 ( Session Law 2007­348).
“ Liaison personnel” is d

N. C. Ethics Commission 1
N. C. ETHICS COMMISSION
1324 MAIL SERVICE CENTER
ROBERT L. FARMER RALEIGH, NORTH CAROLINA 27699­1324
PERRY Y. NEWSON
CHAIRMAN ( 919) 807­4620
FAX ( 919) 807­4619
EXECUTIVE DIRECTOR
Volume 10, Issue 2 Lobbying Newsletter December 2007
“ WHEREAS, THE PEOPLE OF NORTH CAROLINA ENTRUST PUBLIC POWER TO ELECTED AND APPOINTED
OFFICIALS FOR THE PURPOSE OF FURTHERING THE PUBLIC, NOT PRIVATE OR PERSONAL, INTEREST…”
STATE GOVERNMENT ETHICS ACT, PREAMBLE
Lobbying Newsletter
The Lobbying Law, Chapter 120C of the North
Carolina General Statutes, requires that the Ethics
Commission publish a lobbying newsletter at least
annually which contains summaries of advisory opinions,
policies, procedures, and interpretive bulletins as issued
from time to time by the Commission. It must be
distributed to all designated individuals ( legislators,
legislative employees, and public servants), lobbyists, and
lobbyists’ principals and may be published electronically.
This is the Commission’s first such lobbying
newsletter. It contains edited summaries of advisory
opinions issued by the Commission through December 31,
2007. The Commission has not yet issued any formal
policies, procedures, or interpretive bulletins.
The advisory opinion summaries in this newsletter
have been modified to remove any potentially identifying
information about the requesters. Thus, they are
necessarily vague and nonspecific in some respects. They
are also summaries of the opinions, not the more complete
edited or “ redacted” versions found on the Commission’s
web site:
http:// www. ethicscommission. nc. gov/ opinions. htm.
The edited versions should be consulted for a more
complete discussion of the relevant issues involved.
Nevertheless, our hope is that these advisory opinion
summaries will provide general information and guidance
to those facing similar situations and at least give
prospective requesters an idea of the type of information
Commission staff will need in order to respond to specific
requests.
To request an advisory opinion, please contact the
Commission’s staff at ( 919) 807­4620.
Perry Y. Newson, Executive Director
Advisory Opinions in General
Advisory opinions are an integral part of the conflict of
interest identification and avoidance process. They are
provided for in the State Government Ethics Act
( Chapter 138A), the Lobbying Law ( Chapter 120C), and
the Legislative Ethics Act ( Chapter 120). They allow
requesters to receive prospective advice about real
situations they face in their public service, and formal
opinions provide the requester with limited immunity if
they follow the advice given.
The Ethics Commission will publish formal advisory
opinions at least once a year. They will be edited as
necessary to protect the requesters’ identities. They will
be listed in three distinct categories generally according
to the nature of the individual requesters: legislators
( Legislative Ethics Committee opinions), public servants
( ethics opinions), and lobbyists and lobbyists’ principals
( lobbying opinions).
“ Ethics” opinions will generally be those requested by a
public servant and involving Chapter 138A. “ Lobbying”
opinions will generally be those requested by lobbyists,
lobbyists’ principals, and other persons affected by the
Lobbying Law. “ Legislative Ethics Committee” opinions
address questions and issues raised by legislators and
are covered by a combination of Chapter 138A and
Chapter 120. Overall, there is a tremendous overlap of
and interrelationship between all three of these acts,
particularly with regard to the issue of “ gifts.”
The Ethics Commission is the final authority for
advisory opinions issued to public servants, lobbyists,
and lobbyists’ principals. For legislators, however, the
Commission issues “ recommended advisory opinions”
which the Legislative Ethics Committee then adopts,
modifies, or overrules. Once the Legislative Ethics
Committee finalizes and edits the legislative opinions,
the Committee submits them to the Ethics Commission
for publication. The Commission may only publish the
Committee’s formal advisory opinions.
N. C. Ethics Commission 2
Advisory Opinion Basics
Advisory opinions are a key part of three separate but related systems intended to give those people
impacted by the new ethics and lobbying laws prospective guidance about real or reasonably anticipated
situations they face in their public service: ( 1) the State Government Ethics Act ( Chapter 138A), ( 2) the
Lobbying Law ( Chapter 120C), and ( 3) the Legislative Ethics Act ( Chapter 120). Each of these systems has
its unique characteristics, but they all have the following aspects in common.
Written Requests. Requests for formal advisory opinions must be in writing. E­mail
constitutes a
sufficient written request. However, Commission staff frequently gives informal advice in response to verbal
requests, most commonly telephone calls. The big difference between the two means of providing advice is
immunity.
Immunity. Formal advisory opinions provide requesters with limited immunity if they follow the
advice given. Informal opinions do not. Good faith reliance upon a requested formal advisory opinion on a
specific matter immunizes the requester from investigations by the Commission, any adverse action by the
requester’s employing entity, if applicable, and investigation by the North Carolina Secretary of State for
opinions issued after August 9, 2007. Opinions do not confer immunity from any criminal investigation or
prosecution.
Prospective Application. All advisory opinions are intended to give prospective guidance about real
or reasonably anticipated fact settings or circumstances. In other words, advisory opinions look “ forward.”
They are not intended to give after­the­fact
determinations about past conduct and may not be used as de
facto complaints.
Confidentiality. Requests for advisory opinions, the opinions themselves, and all materials related
thereto are confidential and not a matter of public record, although the Commission is required to publish
edited opinions annually. Furthermore, Commission staff may share all information related to formal
advisory opinion requests pertaining to Chapter 120C ( the Lobbying Law) with staff of the Office of the
Secretary of State and all information related to formal advisory opinion requests pertaining to legislators
with staff to the Legislative Ethics Committee, all of whom must treat such information as confidential and
not a matter of public record. Finally, the Commission must forward an unedited copy of formal lobbying
opinions to the Secretary of State at the time such opinion is issued.
Publication. All formal opinions, including those issued by the Legislative Ethics Committee, must
be published in edited form to protect the identities of the individual requesters. Opinions can and will be
published electronically.
Fact­Specific.
All advisory opinions, both formal and informal, are based upon the particular facts
presented and issues raised in the specific request for an opinion. As such, the scope of each opinion is
limited to the request made and should only serve as a definitive answer to the particular requester.
Published edited formal opinions may, however, serve as a general guide to other individuals similarly
situated.
The Commission has authorized its staff to issue formal written advisory opinions pursuant to
sections 120C­102
and 138A­13
of the North Carolina General Statutes upon the receipt of a proper request.
To request an advisory opinion, please contact Commission staff at ( 919) 807­4620.
N. C. Ethics Commission 3
Advisory Opinion Statutory Provisions
The Lobbying Law – Chapter 120C
§ 120C­102.
Advisory opinions
( a) At the request of any person affected by this Chapter, the Commission shall render advisory opinions on
specific questions involving the meaning and application of this Chapter and that person's compliance therewith. The
request shall be in writing and relate to real or reasonably anticipated fact settings or circumstances. The Commission
shall issue advisory opinions having prospective application only. Good faith reliance upon a requested written
advisory opinion on a specific matter shall immunize the designated individual, lobbyist, lobbyist's principal, or other
person requesting that written advisory opinion from all of the following:
( 1) Investigation by the Commission.
( 2) Any adverse action by the employing entity.
( 3) Investigation by the Secretary of State.
( b) Staff to the Commission may issue advisory opinions under procedures adopted by the Commission.
( c) The Commission shall publish its advisory opinions at least once a year, edited as necessary to protect the
identities of the individuals requesting opinions.
( d) Except as provided under subsection ( c) of this section, requests for advisory opinions and advisory
opinions issued pursuant to this section are confidential and not matters of public record. Staff to the Commission may
share all information related to requests made under subsection ( a) of this section with staff of the Office of the
Secretary of State, and staff of the Office of the Secretary of State shall treat that information as confidential and not a
public record. The Commission shall forward an unedited copy of each advisory opinion under this section to the
Secretary of State at the time the advisory opinion is issued to the requestor, and the Secretary of State shall treat that
unedited advisory opinion as confidential and not a public record.
( e) Requests for advisory opinions may be withdrawn by the requestor at any time prior to the issuance of an
advisory opinion."
The Legislative Ethics Act – Chapter 120
§ 120­104.
Advisory opinions.
( a) At the request of any member of the General Assembly, the Committee shall render formal advisory opinions
on specific questions involving legislative ethics.
( b) The Committee shall receive and review recommended advisory opinions issued to legislators, except the
Lieutenant Governor, by the State Ethics Commission under G. S. 138A­13.
The opinion shall not be considered a
formal advisory opinion until the advisory opinion is adopted by the Committee. The Committee may modify or
overrule the recommended advisory opinions issued to legislators by the State Ethics Commission, and the final action
on the opinion by the Committee shall control.
( c) A legislator who acts in reliance on a formal advisory opinion issued by the Committee under this section shall
be entitled to the immunity granted under G. S. 138A­13(
b).
( d) Staff to the Committee may issue informal, nonbinding advisory opinions under procedures adopted by the
Committee.
( e) The Committee may interpret Chapter 138A of the General Statutes as it applies to legislators, except the
Lieutenant Governor, and these interpretations are binding on all legislators upon publication.
( f) The Committee shall submit its formal advisory opinions to the State Ethics Commission, and the State Ethics
Commission shall publish the Committee's opinions under G. S. 138A­13(
d). The Committee shall edit for publication
purposes as necessary to protect the identities of the individuals requesting opinions prior to submission to the State
Ethics Commission. The Committee may distribute the edited formal advisory opinion to members of the General
Assembly prior to publication by the State Ethics Commission.
( g) Except as provided under subsection ( f) of this section, requests for advisory opinions, advisory opinions
issued under this section, and advisory opinions received from the State Ethics Commission are confidential and not
matters of public record.
( h) Requests for advisory opinions may be withdrawn by the requestor at any time prior to the issuance of an
advisory opinion.
N. C. Ethics Commission 4
The Ethics Law – Chapter 138A
§ 138A­13.
Advisory opinions.
( a) At the request of any public servant or legislative employee, any individual who is responsible for
the supervision or appointment of a person who is a public servant or legislative employee, legal counsel for
any public servant, any ethics liaison under G. S. 138A­14,
or any member of the Commission, the
Commission shall render advisory opinions on specific questions involving the meaning and application of
this Chapter and the public servant's or legislative employee's compliance therewith. The request shall be in
writing, electronic or otherwise, and relate prospectively to real or reasonably anticipated fact settings or
circumstances. On its own motion, the Commission may render advisory opinions on specific questions
involving the meaning and application of this Chapter. The Commission shall issue advisory opinions
having prospective application only. Reliance upon a requested written advisory opinion on a specific matter
shall immunize the public servant or legislative employee, on that matter, from all of the following:
( 1) Investigation by the Commission, except for an inquiry under G. S. 138A­12(
b)( 3).
( 2) Any adverse action by the employing entity.
( 3) Investigation by the Secretary of State.
( b) At the request of a legislator, the Commission shall render recommended advisory opinions on
specific questions involving the meaning and application of this Chapter and Part 1 of Article 14 of Chapter
120 of the General Statutes, and the legislator's compliance therewith. The request shall be in writing,
electronic or otherwise, and relate prospectively to real or reasonably anticipated fact settings or
circumstances. The Commission shall issue advisory opinions having prospective application only. Until
action is taken by the Committee under G. S. 120­104,
reliance upon a requested written advisory opinion on
a specific matter shall immunize the legislator, on that matter, from all of the following:
( 1) Investigation by the Committee or Commission, except for an inquiry under
G. S. 138A­12(
b)( 3).
( 2) Any adverse action by the house of which the legislator is a member.
( 3) Investigation by the Secretary of State.
Any advisory opinion issued to a legislator under this subsection shall immediately be delivered to the chairs
of the Committee, together with a copy of the request. Except for the Lieutenant Governor, the immunity
granted under this subsection shall not apply after the time the Committee modifies or overturns the advisory
opinion of the Commission in accordance with G. S. 120­104.
( c) Staff to the Commission may issue advisory opinions under procedures adopted by the
Commission.
( d) The Commission shall publish its advisory opinions at least once a year. These advisory opinions
shall be edited for publication purposes as necessary to protect the identities of the individuals requesting
opinions. When the Commission issues a recommended opinion to a legislator under subsection ( b) of this
section, the Commission shall publish only the formal advisory opinion of the Committee upon its
submission to the Commission.
( e) Except as provided under subsection ( d) of this section, requests for advisory opinions, and
advisory opinions issued under this section, are confidential and not public records. Staff to the Commission
may share all information related to requests made under subsection ( b) of this section with staff to the
Committee, and staff to the Committee shall treat that information as confidential and not a public record.
( f) This section shall not apply to judicial officers.
( g) Requests for advisory opinions may be withdrawn by the requestor at any time prior to the
issuance of an advisory opinion.
N. C. Ethics Commission 5
ADVISORY OPINION SUMMARIES
LOBBYING OPINIONS – CHAPTER 120C
AO­L­07­0001
Legislative Breakfast & Gift Ban Exceptions – “ Public Events” & “ Educational Meetings.”
G. S. 138A­32(
e)( 1) ; 138A­3(
29) ; and 138A­32(
e)( 3)( i)
October 29, 2007
A lobbyist asked whether under the new ethics and lobbying laws a lobbyist principal association
(“ association”) could sponsor a legislative breakfast for incoming freshman legislators. The lobbyist stated
that all freshman legislators would be invited and 10 to 12 members of the association would be present
along with some of the association’s staff members, including registered lobbyists. The purpose of the
meeting was to provide an overview of issues of interest to the association, the role of the association with
regard to those issues, and to discuss related legislative issues in general and potential 2007 legislation in
particular.
N. C. G. S. § 120C­303(
a) and § 138A­32(
c) prohibit a lobbyist principal association from providing this gift
of food and beverages at the “ freshman” legislative reception, unless the event meets an exception to the gift
ban pursuant to N. C. G. S. § 138A­32(
e). In reviewing the § 138A­32(
e) gift ban exceptions, the
association’s “ freshman” legislative breakfast did not fit under one of the gift ban exceptions.
N. C. G. S. § 138A­32(
e)( 1) pertains to food and beverages for immediate consumption provided at a “ public
event.” In reviewing the subsections for this section that applied to legislators and applying the facts
provided, the exception did not fit. Foremost, this legislative breakfast was not open to the general public,
and all of the members of the North Carolina General Assembly (“ GA”) were not invited. Therefore, this
legislative breakfast did not meet the definition of public event under N. C. G. S. § 138A­3(
29) a. 1.
Moreover, the newly elected freshman legislators are currently not a recognized legislative caucus,
delegation, or standing committee; therefore, the association’s “ freshman” legislative breakfast did not meet
the first requirement of public event in N. C. G. S § 138A­3(
29) a. 2. Accordingly, the association’s planned
“ freshman” legislative breakfast did not meet either of the definitions of public event for legislators. 1
Another possible gift ban exception in this situation involves “ educational meetings.” There is a gift ban
exception under N. C. G. S. § 138A­32(
e)( 3)( i) for certain “ reasonable actual expenditures,” including food
1 For future reference note that section 24 of House Bill 1111 ( Session Law 2007­348)
amended the
definition of “ public event” under N. C. G. S. § 138A­3(
29) and eliminated the two separate subsections, one
for legislators and legislative employees, and another for public servants. Pursuant to section 24 of HB
1111, there are now five definitions of “ public event” under N. C. G. S. § 138A­3(
29), and if the sponsoring
person and their/ its event meet all of the requirements of any one of these five definitions, the event is a
public event for legislators, legislative employees, and public servants. Section 24 of HB 1111 became
effective on August 9, 2007. The freshman legislative breakfast under consideration here would still not
qualify as a “ public event” under any of the five definitions of “ public event” created by section 24 of HB
1111.
N. C. Ethics Commission 6
and beverage expenditures, of a legislator incurred at an “ educational meeting” if certain requirements are
met. The statute does not define “ educational meeting,” and at the time this advisory opinion was issued, it
was unclear how the Commission would define that term. The Commission did address this issue at its
February 22, 2007, meeting and adopted some non­exclusive
factors to be used as criteria for determining
what is an “ educational meeting” under N. C. G. S. § 138A­32(
e)( 3)( i) (“ Criteria”). 2 See Attachment A below.
Whether a particular meeting, conference, or other event will be considered an educational meeting is a fact­specific,
case­by­case
determination. Since specific facts are critical to this determination, and the initial
request letter did not provide sufficient details about the proposed event, Commission staff was unable to
determine if it would have qualified under the § 138A­32(
e)( 3)( i) gift ban exception. See the educational
meeting Criteria referenced above. For example, staff would need to know the identity of the speaker( s) and
the general nature of each speaker’s presentation, as well as the overall agenda for the entire breakfast
meeting. Also, staff would need to know more about the association’s legislative agenda and any plans it had
for the introduction or support of specific legislation.
However, if legislative issues, questions, and/ or legislative agendas were going to be a significant part of this
particular breakfast meeting, the meeting would probably not be considered an educational meeting under
the new laws. The requester stated that both potential 2007 legislative issues and general legislative issues
were going to be discussed at the legislative breakfast, but did not provide the amount of time that was going
to be spent on these legislative issues. This information would be an important factor along with the other
factors addressed in the above­referenced
Criteria. See attached. Without such information, staff could not
make a determination as to whether the association’s legislative breakfast met the educational meeting
exception under N. C. G. S. § 138A­32(
e)( 3)( i).
Based upon the forgoing analysis, the association in question could not provide the freshman legislators this
breakfast at no charge. Note that if each legislator paid fair market value for his or her breakfast, the
association’s breakfast would not have been a gift and the freshman legislators could have accepted the free
meal. See N. C. G. S § 138A­3(
15) a.
Attachment A ­­Educational
Meeting Criteria:
Criteria for Determining an “ Educational Meeting” Under § 138A­32(
e)( 3)( i)
While there is an exception to the gifts ban for expenditures associated with “ educational meetings,” the
statute does not define that key term. So the Commission and its staff are left with the task of determining
what is “ an educational meeting.”
Without a statutory definition, and until the Commission attempts to define “ educational meeting” through
formal or informal rulemaking, our best option is to apply various non­exclusive
factors or criteria to the
specific situations with which we are presented. Determining what is or is not an “ educational meeting”
involves applying these non­exclusive
factors or criteria on a fact­specific,
case­by­case
basis. To aid that fact­specific
determination, the Commission has adopted the following criteria. Again, the list is non­exclusive,
and the Commission may modify it as necessary in the future.
Remember that an “ educational meeting” must be for purposes primarily related to the public duties
and responsibilities of the public servant, legislator, or legislative employee.
2 Attached to this advisory opinion is a copy of these non­exclusive
factors titled “ Criteria for Determining
an ‘ Educational Meeting’ under N. C. G. S. § 138A­32(
e)( 3)( i).” The Commission has applied these Criteria
in another advisory opinion issued in response to another requester. [ See AO­L­07­0012.]
N. C. Ethics Commission 7
In applying these factors, the focus of the Commission will be on the intent of the donor and the recipient’s
knowledge of that intent. The determination as to whether a meeting is “ educational” will vary according to
the facts and circumstances of each meeting.
I. Is the educational content of the meeting related to a specific public duty or responsibility of the
public servant, legislator, or legislative employee?
If so, what specific duty or responsibility?
· for legislators and legislative employees, this will be interpreted very broadly;
· for public servants, less so because of the scope of their public duties.
If the content of the meeting is not primarily related to a specific duty or responsibility of a public
servant, legislator, or legislative employee, then it probably does not qualify as an educational meeting
under this section.
II. Is the primary purpose of the meeting educational?
A. If the meeting’s primary purpose is to influence a public servant, legislator, or legislative
employee with respect to executive or legislative action ( rather than educate them on a legitimate
subject), the meeting is not “ educational.” A meeting primarily intended to promote learning for self­improvement
relative to the public duties of a person is “ educational,” not a meeting intended to curry
favor concretely.
Meetings intended to influence rather than educate may include meetings that are directly related to an
upcoming official vote, recommendation, or other action that the public servant, legislator, or
legislative employee may take, such as the discussion of a legislative or executive agenda or specific
concerns with respect to a matter that would require legislative or executive action to remedy.
In determining the purpose of the meeting, the Commission will consider whether the entity holding
the meeting:
· has legislation pending before the General Assembly or intends to request legislative action;
· is seeking, or seeking to impact, North Carolina legislative or executive action at the time of
the meeting;
· can be impacted by the actions or decisions of the public servant, legislator, or legislative
employee; or
· if the facts demonstrate that the entity’s purpose in holding the meeting is to advocate on
behalf of legislative or executive action.
B. What is the nature of the entity holding the meeting?
· Is the entity a State agency or governmental entity?
· Is the entity an educational institution?
· Is the entity an organization that routinely sponsors meetings with educational content?
· Is the entity holding the meeting a Lobbyist Principal?
C. Is the Lobbyist Principal paying for the meeting also sponsoring the meeting?
· Is the source of the funding ( gift) the same as the source of the education ( as opposed to a
Lobbyist Principal paying to send a public servant, legislator, or legislative employee to
another entity’s meeting)?
D. What is the complete agenda of the meeting?
· What proportion of the individual events scheduled at the meeting have a speaker, roundtable
discussion, or other educational content that is directly related to the public duties of the
public servant, legislator, or legislative employee?
N. C. Ethics Commission 8
· What proportion of those sessions is held in the absence of a meal or entertainment?
· What proportion of the meeting agenda includes meals or entertainment with formal
educational content?
· Does the agenda cover a wide range of topics or have a very limited, industry­specific
focus?
· Would the meeting take place regardless of whether the invited public servant, legislator, or
legislative employee attends?
· Who are the speakers?
· Are they associated with the Lobbyist Principal or its Lobbyist?
· Are they outside experts in their field?
E. Is the location of the meeting directly related to the meeting’s educational content?
· Is there a reason for holding the meeting in a location other than where the attendees live or
work?
· Is it necessary to the meeting’s educational purpose that an individual travel in connection
with the meeting?
· Is the meeting sponsored by a state, national, or international organization for the benefit of its
state, national, or international membership?
· Is the location of the meeting otherwise integral to the educational content of the meeting?
· Would an individual be capable of obtaining a comparable degree of educational information
through other means that would not require travel?
F. Is the length of the educational meeting reasonably necessary to fulfilling the educational
purpose of the trip?
G. What degree of personal benefit does the individual gain from attendance at the meeting?
· Does the personal benefit outweigh the public benefit gained by the educational value of the
meeting?
H. Are there other factors that would support the conclusion that the meeting is educational?
AO­L­07­0002
3
Designated Individuals Acting in Their Official Capacity Do Not Need to Register as “ Liaison Personnel.”
G. S. 120C­700
May 18, 2007
A “ public servant” requested a formal advisory opinion on whether he or she had to register as a “ lobbyist”
pursuant to North Carolina General Statutes (“ N. C. G. S.”) Chapter 120C, the new Lobbying Law. Public
servants are also “ designated individuals” under the Lobbying Law. 4
Part of the public servant/ designated individual’s responsibilities and duties include advocating for
legislative and executive action through direct communications with legislators, legislative employees, and
other public servants. All of these advocacy responsibilities and duties relate solely to matters pertaining to
the public servant/ designated individual’s government employment and his or her official position.
3 Note: This opinion deals with the same substantive issue as AO­L­07­0004.
4 “ Designated individuals” include legislators, legislative employees, and public servants. N. C. G. S. § 120C­100(
a)( 2). “ Public servants” are defined in N. C. G. S. § 138A­3(
30).
N. C. Ethics Commission 9
Under these facts, the public servant/ designated individual did not need to register as a liaison personnel. 5
Except for certain gift and scholarship reporting purposes, designated individuals are exempt from the
lobbying law while they are acting in their official capacities. N. C. G. S. § 120C­700
( 6). Therefore, as long as
the public servant/ designated individual is acting in his or her official capacity when advocating for
legislative or executive action, that person is exempt from the general requirements of Chapter 120C and
does not need to register as a liaison personnel. 6 A public servant/ designated individual may also be exempt
pursuant to N. C. G. S. § 120C­700
( 3) as a State employee appearing solely in connection with matters
pertaining to his or her office and public duties.
AO­L­07­0003
“ Educational Meeting” and “ Public Event” Gift Ban Exceptions.
G. S. 138A­32(
e)( 1) ; 138A­3(
29) ; and 138A­32(
e)( 3)( i)
November 28, 2007
A lobbyist requested guidance on determining and developing criteria for an “ educational dinner” being
coordinated for a group of legislators and a presumed lobbyist principal company. The lobbyist also asked
who could pay for this dinner for these legislators based on the new Lobbying Law ( Chapter 120C) and the
new State Government Ethics Act ( Chapter 138A).
Initially, the lobbyist asked the Commission to develop criteria to follow for this “ meeting.” This part of the
request was not a request for an advisory opinion under the law. Lobbyists and lobbyist principals, not the
Commission or its staff, must determine how particular events will be planned, organized, and conducted.
Once that is done, Commission staff will apply the applicable legal standards to the particular facts
presented.
The remainder of the request was relatively vague and nonspecific, making it hard to give definitive
answers. For example, the request did not specifically state whether the potential corporate participant was a
lobbyist principal or whether the requester was that entity’s official lobbyist. Nor did the request state who
was going to pay for this dinner event or for each of the legislator’s meals. Therefore, certain assumptions
were made for purposes of issuing this opinion. For example, it was assumed that the potential corporate
participant was a lobbyist principal and the requester was its lobbyist. In addition, it was assumed that the
lobbyist principal was the “ person” that was planning on paying for this dinner event and for each
legislator’s meal.
5 While the original request and an earlier opinion spoke in terms of potential registration as a “ lobbyist,”
the correct term is really “ liaison personnel.” The end result is the same. Chapter 120C requires all agencies
and constitutional officers of the State to designate “ liaison personnel” to lobby for legislative action and
forbids the use of State funds to hire outside, non­State
employees to engage in legislative lobbying.
N. C. G. S. § 120C­500(
a) & ( b).
6 If a designated individual accepts reportable expenditures made for the purpose of lobbying, or
“ scholarships” as defined in N. C. G. S. § 120C­800
( g), either the designated individual or the donor may need
to report those items with the Secretary of State’s office. See N. C. G. S. § 120C­800.
N. C. Ethics Commission 10
Based on these assumptions, this gift of food and beverage at this “ legislative” dinner event was prohibited
under N. C. G. S. § 120C­303(
a) and § 138A­32(
c), unless it met an exception to the gift ban pursuant to
N. C. G. S. § 138A­32(
e).
The initial request referred to this event as an “ educational” dinner for a designated group of legislators.
Therefore, one possible exception to the general gift ban is the “ educational meeting” exception of § 138A­32(
e)( 3)( i). This gift ban exception covers certain “ reasonable actual expenditures,” including food and
beverage expenditures, of a legislator incurred at an “ educational” meeting if certain requirements are met.
The statute does not define “ educational meeting,” and at the time this advisory opinion was issued, it was
unclear how the Commission would define that term. The Commission did address this issue at its February
22, 2007, meeting and adopted some non­exclusive
factors to be used as criteria for determining what is an
“ educational meeting” under N. C. G. S. § 138A­32(
e)( 3)( i) (“ Criteria”). 7 See attached.
Whether a particular meeting, conference, or other event will be considered an educational meeting is a fact­specific,
case­by­case
determination. Since specific facts are critical to this determination, and the initial
request letter did not provide sufficient details about the proposed legislative dinner, Commission staff was
unable to determine if it would have qualified under the § 138A­32(
e)( 3)( i) gift ban exception. See the
educational meeting Criteria referenced above.
However, another exception may have applied – the “ public event” exception of § 138A­32(
e)( 1). N. C. G. S.
§ 138A­32(
e)( 1) pertains to food and beverage for immediate consumption provided at a “ public event.”
Public event is defined in N. C. G. S. § 138A­3(
29). 8 Prior to the passage of House Bill 1111 ( Session Law
2007­348)
on August 9, 2007, the definition of “ public event” had two separate subsections, one for
legislators and legislative employees, and another for public servants. If both legislators and public servants
were invited to a prospective public event, all requirements of both subsections had to be met in order satisfy
this exception, including who must be invited to the organized gathering.
N. C. G. S. § 138A­3(
29) a. 2 had a two­pronged
test . 9 The first prong is that the “ person” ( person is broadly
defined under N. C. G. S. § 138A­3(
27) and includes business entities and associations) sponsoring the event
must invite either the entire membership of the House of Representatives or of the Senate, or the entire
membership of one of the statutorily­listed
legislative subgroups, which include legislative committees and
standing subcommittees. The committee or standing subcommittee referenced in N. C. G. S. § 138A­3(
29) a. 2
7 Attached to this advisory opinion is a copy of these non­exclusive
factors titled “ Criteria for Determining
an ‘ Educational Meeting’ under N. C. G. S. § 138A­32(
e)( 3)( i).” The Commission has applied these Criteria
in another advisory opinion issued in response to another requester. [ See AO­L­07­0012.]
8 Section 24 of House Bill 1111 ( Session Law 2007­348)
amended the definition of “ public event” under
N. C. G. S. § 138A­3(
29) and eliminated the two separate subsections ( one for legislators/ legislative
employees and one for public servants). Pursuant to the new legislative changes, there are now five
definitions of “ public event” under N. C. G. S. § 138A­3(
29), and if the sponsoring person and their/ its event
meet all of the requirements of any one of these five definitions, the event is a public event for all covered
attendees ( legislators, legislative employees, and public servants). Thus it is no longer necessary to meet
both sets of requirements.
9 The amended definition of “ public event” ( section 24 of HB 1111) resulted in N. C. G. S. § 138A­3(
29) a. 2
being renumbered as N. C. G. S. § 138A­3(
29) b. The two­pronged
test contained in § 138A­3(
29) a. 2 remains
under § 138A­3(
29) b.
N. C. Ethics Commission 11
must be an existing and recognized committee or standing subcommittee established pursuant to the rules of
the Senate or House. 10
Commission staff has determined that invitations under the Ethics Act and the Lobbying Law must be in
writing ( e­mails
are included as a written invitation), be sent out at least ten ( 10) days in advance of the
event, state the date, time and location of the event, identify the event, and list the names of the sponsors of
the event. Thus, the sponsoring lobbyists, lobbyist principals, and “ interested persons” 11 must be identified
and known prior to the event occurring.
After meeting this first invitation prong, a second prong must also be met. This second prong of N. C. G. S. §
138A­3(
29) a. 2 12 can be met in three ways, depending upon who/ what is determined to be the “ person”
holding the organized gathering. The three ways are as follows:
( I) at least 10 individuals associated with the person actually attend, other than the legislator or
their immediate family; or
( II) all shareholders, employees, board members, officers, members, or subscribers of the person located
in North Carolina are notified and invited to attend; or
( III) the person is a governmental body and the gathering is subject to the open meetings law.
The lobbyist here planned to invite a designated group of legislators, who were members of a specific Senate
or House committee, to this dinner. At the time this formal advisory opinion was issued, the specific
standing committees referenced in the request had been established by rule in both the Senate and the House;
however, no legislators had been formally appointed to them. Once members were appointed to these
committees, the lobbyist principal’s dinner event invitation to the entire membership of either standing
committee would have resulted in the dinner event meeting one of the initial requirements of N. C. G. S. §
138A­3(
29) a. 2. In addition to meeting an initial requirement stated in § 138A­3(
29) a. 2, the lobbyist
principal also had to meet either subsection ( I) or subsection ( II) of § 138A­3(
29) a. 2 13 for the gift ban
exemption for food and beverage for immediate consumption at a public event to apply to legislators.
10 Recognized standing committees and subcommittees of the 2007 General Assembly are those established
in accordance with Senate Rule 32 and House Rule 26 of the 2007 General Assembly, and by resolution of
the Senate or House. When the General Assembly adjourns the 2008 Regular Session of the General
Assembly sine die, these committees will no longer exist.
11 “ Interested person” is a non­statutory
term used by Commission staff to describe those persons set out in
§ 138A­32(
d), as amended by sections 36 and 37 of HB 1111, and as expanded by the definition of “ person”
in 138A­3(
27), as amended by section 23 of HB 1111. An “ interested person” is a person who ( 1) is doing or
seeking to do business of any kind with the employing entity of the public servant who is being offered or
given the gift; ( 2) is engaged in activities that are regulated or controlled by the employing entity of the
public servant being offered or given the gift; or ( 3) has financial interests that may be substantially and
materially affected, in a manner distinguishable from the public generally, by the performance or
nonperformance of the official duties of the public servant who is offered or given the gift. A public servant
can only accept a gift, directly or indirectly, from an “ interested person” if the gift meets a gift ban
exemption listed in 138­32(
e).
12 N. C. G. S. § 138A­3(
29) a. 2 is now N. C. G. S. § 138A­3(
29) b.
13 Since the lobbyist principal is not a governmental body, subsection III of N. C. G. S. § 138A­3(
29) a. 2 ( now
renumbered as § 138A­3(
29) b. 3) would not be applicable.
N. C. Ethics Commission 12
The request letter did not state specifically who the lobbyist principal was planning on inviting in addition to
the designated group of legislators; however, several questions seemed to be based on the requirements
stated in subsections ( I) and ( II) of N. C. G. S. § 138A­3(
29) a. 2. Specifically, it was asked whether an
employee of the person, in this case the lobbyist principal, would be deemed to be associated with the
person. Yes, an employee of the lobbyist principal here would be an individual associated with the lobbyist
principal for the purposes of meeting the requirement of the gift ban exemption under § 138A­3(
29) a. 2. I. 14
It was also asked whether members of advocacy groups would qualify as “ individuals associated with the
person.” Whether an individual is “ associated with the person” will often be determined by the Commission
on a case­by­case
basis depending upon the facts of the connection with the person to which the gift ban
applies. The request letter did not contain the necessary details for the Commission to make a determination
as to whether members of an unnamed and unidentified advocacy group would be deemed to be “ individuals
associated with” the lobbyist principal. Accordingly, the Commission could not determine whether the
attendance of at least 10 members of an advocacy group at this lobbyist principal’s legislative dinner would
meet the subsection ( I) requirements.
The final question appeared to be asking whether the invitation of all of the lobbyist principal’s employees
located in North Carolina would satisfy the requirement of the gift ban exemption under § 138A­3(
29) a. 2. II. 15 Assuming that the lobbyist principal had invited all of the appointed members of the Senate or
House standing committee as discussed above, thus meeting the first prong of N. C. G. S. § 138A­3(
29) a. 2,
then if the lobbyist principal formally notified and invited all of its employees located in North Carolina to
this legislative dinner, the proposed legislative dinner would have met the § 138A­3(
29) a. 2. II gift ban
exemption and the lobbyist principal could have provided food and beverages for immediate consumption to
the invited legislators.
In the future, all requesters should provide the Commission with the actual or reasonably anticipated details
of planned events, such as who is actually being invited, rather than giving hypothetical invitees. N. C. G. S. §
120C­102
requires as much, and providing these details will assist the Commission in answering questions
in a more direct and thorough manner while expediting the Commission’s response time. In addition, the
limited civil immunity granted by the Commission from investigation by the Commission is exclusively tied
to the specific facts and circumstance addressed and answered by the Commission in the written advisory
opinion. Therefore, any questions or issues raised that the Commission could not address, including those
that lacked sufficient detail, are not covered by this written advisory opinion.
Attachment A ­­Educational
Meeting Criteria: see AO­L­07­0001
above.
14 N. C. G. S. § 138A­3(
29) a. 2. I is now renumbered as § 138A­3(
29) b. 1.
15 N. C. G. S. § 138A­3(
29) a. 2. II is now renumbered as § 138A­3(
29) b. 2.
N. C. Ethics Commission 13
AO­L­07­0004
16
Designated Individuals Acting in Their Official Capacity Do Not Need to Register as “ Liaison Personnel.”
G. S. 120C­700
May 18, 2007
A “ public servant�� requested a formal advisory opinion on whether he or she had to register as a “ lobbyist”
pursuant to North Carolina General Statutes (“ N. C. G. S.”) Chapter 120C, the new Lobbying Law. Public
servants are also “ designated individuals” under the Lobbying Law. 17
Part of the public servant/ designated individual’s responsibilities and duties include advocating for
legislative and executive action through direct communications with legislators, legislative employees, and
other public servants. All of these advocacy responsibilities and duties relate solely to matters pertaining to
the public servant/ designated individual’s government employment and his or her official position.
Under these facts, the public servant/ designated individual did not need to register as a liaison personnel. 18
Except for certain gift and scholarship reporting purposes, designated individuals are exempt from the
lobbying law while they are acting in their official capacities. N. C. G. S. § 120C­700
( 6). Therefore, as long as
the public servant/ designated individual is acting in his or her official capacity when advocating for
legislative or executive action, that person is exempt from the general requirements of Chapter 120C and
does not need to register as a liaison personnel. 19 A public servant/ designated individual may also be exempt
pursuant to N. C. G. S. § 120C­700
( 3) as a State employee appearing solely in connection with matters
pertaining to his or her office and public duties.
AO­L­07­0005
Legislative Reception, Indirect Gifts, & the “ Public Event” Gift Ban Exception.
G. S. 138A­32(
e)( 1)
October 3, 2007
A North Carolina organization (“ Organization”) asked for an opinion concerning the hosting and
sponsorship of a legislative reception for all newly­elected
members of the North Carolina General
Assembly (“ GA”). While the hosting Organization is not a lobbyist principal, many lobbyist principals are
helping sponsor the legislative reception. Specifically, this legislative reception would be sponsored by
approximately 60 different sponsors, many of which were lobbyist principals. All members of the GA were
16 Note: This opinion deals with the same substantive issue as AO­L­07­0002.
17 “ Designated individuals” include legislators, legislative employees, and public servants. N. C. G. S. §
120C­100(
a)( 2). “ Public servants” are defined in N. C. G. S. § 138A­3(
30).
18 While the original request and an earlier opinion spoke in terms of potential registration as a “ lobbyist,”
the correct term is really “ liaison personnel.” The end result is the same. Chapter 120C requires all agencies
and constitutional officers of the State to designate “ liaison personnel” to lobby for legislative action and
forbids the use of State funds to hire outside, non­State
employees to engage in legislative lobbying.
N. C. G. S. § 120C­500(
a) & ( b).
19 If a designated individual accepts reportable expenditures made for the purpose of lobbying, or
“ scholarships” as defined in N. C. G. S. § 120C­800
( g), either the designated individual or the donor may need
to report those items with the Secretary of State’s office. See N. C. G. S. § 120C­800.
N. C. Ethics Commission 14
invited along with all Council of State members, all Supreme Court justices and Court of Appeals judges,
the Governor and his Cabinet, and all North Carolina members of the United States Congress. Although the
legislative reception was technically “ open to the general public,” there would be a substantial charge to the
public to attend this reception.
The hosting Organization asked the following questions: ( 1) who is actually giving the food and beverages at
this legislative reception when sponsors give the money to the Organization specifically for the purpose of
paying for the reception and the Organization then directly contracts with and pays for catering the
reception; ( 2) if the food and beverages are determined to be given by the sponsors, including lobbyist
principals, does this legislative reception meet an exception to the gift ban; and ( 3) if the food and beverages
can be given, who must report the expenditures to the Secretary of State’s Office?
Based on the fact that the sponsors were specifically giving the money to the Organization to pay for the
legislative reception, the sponsors were indirectly giving the gifts of food and beverages to the legislators
and public servants. Since some of the sponsors were lobbyist principals, this gift of food and beverages
was prohibited under N. C. G. S. § § 120C­303(
a) and 138A­32(
c), unless it met an exception to the gift ban
pursuant to N. C. G. S. § 138A­32(
e). Based upon the specific facts provided by the requester, it was
determined that the § 138A­32(
e)( 1) exception for food and beverages consumed at a “ public event” may be
applicable if this legislative reception met all of the requirements to be a public event for both legislators and
public servants.
“ Public event” is defined in N. C. G. S. § 138A­3(
29). Prior to the passage of House Bill 1111 on August 9,
2007, the definition of “ public event” had two separate subsections ­­one
for legislators/ legislative
employees and one for public servants. If both legislators and public servants were invited to a prospective
public event, all requirements of both subsections had to be met in order satisfy this exception, including
who must be invited to the organized gathering. 20
Although it was initially stated that the legislative reception was “ open to the general public,” in fact there
would be a substantial charge per person to attend this reception, while legislators and public servants would
be admitted free of charge. The issue of whether an event that has a charge to attend is truly “ open to the
general public” has not been addressed by the Ethics Commission. However, this legislative reception may
not have been “ open to the general public” making the then­existing
§ 138A­3(
29) a. 1. public event
definition for legislators and the then­existing
§ 138A­3(
29) b. 1. public event definition for public servants
inapplicable. Charging the general public to attend a legislative reception may also make the post­HB
1111
and current definitions of public event as defined in § 138A­3(
29) a. and § 138A­3(
29) c. inapplicable.
However, that issue did not need to be addressed at this time because this particular legislative reception
may have met some of the other definitions of public event contained in § 138A­3(
29) for legislators and
public servants, both pre­HB
1111 and post­HB
1111, based upon who was being notified and invited to
attend.
N. C. G. S. § 138A­3(
29) a. 2. II. applied when the event was an organized gathering of a person
20 Section 24 of House Bill 1111 amended the definition of “ public event” under N. C. G. S. § 138A­3(
29)
and eliminated the two separate subsections ( one for legislators/ legislative employees and one for public
servants). Pursuant to the new legislative changes, there are now five definitions of “ public event” under
N. C. G. S. § 138A­3(
29), and if the sponsoring person and their/ its event meet all of the requirements of any
one of these five definitions, the event is a public event for all covered attendees ( legislators, legislative
employees, and public servants). Thus it is no longer necessary to meet both sets of requirements.
N. C. Ethics Commission 15
( person is broadly defined under N. C. G. S. § 138A­3(
27) and includes business entities, associations, and
organizations) to which the entire GA was invited and to which all shareholders, employees, board members,
officers, members or subscribers of the person located in North Carolina were notified and invited to attend.
Accordingly, since all members of the GA were invited, if each sponsor formally notified and invited all of
its board members or all of its officers who were located in North Carolina to this legislative reception, the
proposed legislative reception would have met the 138A­3(
29) a. 2. definition of “ public event” and the
lobbyist principals would have been allowed to give legislators food and beverages for immediate
consumption at this reception per the § 138A­32(
e)( 1) gift ban exemption.
A similar public event provision pertained to public servants. The § 138A­3(
29) b. 3. public event exemption
applied when the event was an organized gathering of a person to which at least 10 public servants were
invited and to which all shareholders, employees, board members, officers, members or subscribers of the
person located in a specific North Carolina office or county were notified and invited to attend. Since more
than 10 public servants were invited, if each sponsor formally notified and invited all of its board members
or all of its officers who were located in a specific North Carolina office or county to this legislative
reception, the proposed legislative reception would have met the 138A­3(
29) b. 3. definition of “ public event”
and the lobbyist principals would have been allowed to give legislators food and beverages for immediate
consumption at this reception.
After the passage of HB 1111 on August 9, 2007, if a person and their event meet all of the requirements of
any one of the five definitions of “ public event” contained in § 138A­3(
29), the person may give the gift of
food and beverages for immediate consumption under the gift ban exemption of 138A­32(
e)( 1) to legislators,
legislative employees, and public servants. The person( s) sponsoring the event no longer needs to meet the
requirements of two separate subsections or two different definitions of “ public event” in order to give to
different types of designated individuals ( legislators, legislative employees, and public servants) under this
gift ban exception.
The hosting Organization also asked who should report the expenditures for the food and beverages given to
the legislators and public servants at this reception. N. C. G. S. § 120C­403(
b)( 5) requires each lobbyist
principal to report, among other things, all reportable expenditures made for the purpose of lobbying, all
reportable expenditures for gifts given under any of the gift ban exemptions of N. C. G. S. § 138A­32(
e) ( 1) –
( 9), ­(
e)( 11), ­(
e)( 12), 21 and all gifts given under the gift ban exemption of N. C. G. S. § 138A­32(
e)( 10) with a
value of more than $ 200. The lobbyist principal reports are to be filed with the Secretary of State’s Office
quarterly when the GA is not in session and monthly when the GA is in session. N. C. G. S. § 120C­403(
a)
and ( c).
Accordingly, the sponsors who are lobbyist principals are required to report the food and beverages
expenditures on their lobbyist principal reports they each file with the Secretary of State’s Office if the value
of the expenditure is greater than $ 10 per day per individual legislator, individual public servant, or that
individual’s immediate family. N. C. G. S. § § 120C­403(
b)( 5) and 120C­100(
a)( 12) a. The sponsors who are
not lobbyist principals, such as the hosting Organization, need to report expenditures made for the purpose
of lobbying if the reportable expenditures given per individual legislator, individual public servant, or that
person’s immediate family equal a total cumulative value of over $ 200 in a calendar quarter. N. C. G. S. §
120C­800
( a).
21 House Bill 1111 also added two new gift ban exceptions under N. C. G. S. § 138A­32(
e). See Section 41 of
HB 1111. These gift ban exemptions of –( e)( 11) and –( e)( 12) are retroactive to January 1, 2007. See
Section 44 of HB 1111.
N. C. Ethics Commission 16
AO­L­07­0006
Lobbyist Giving Legislator a Free Ride; Gift Ban Exceptions – Personal Relationship Exception; Reporting.
G. S. 138A­32(
e)( 10) ; 120C­401(
b) ; 120C­402(
b)
September 12, 2007
A lobbyist requested an opinion as to whether he or she could provide a ride in a rental car to a “ designated
individual” 22 while both persons were traveling out­of­state
on a personal, non­public
service related trip.
Specifically, the lobbyist was flying out­of­state
to attend a sporting event and planned to rent a car for local
transportation. A designated individual, who is also a former college classmate and personal friend of the
lobbyist, was also planning on attending this sporting event. The lobbyist asked whether giving this
designated individual a ride from the airport to the hotel in the rental vehicle was allowed under the new
Ethics and Lobbying laws and if so what reporting obligations would apply.
Under the new Lobbying Law, a lobbyist is prohibited from giving a gift to a designated individual unless
the gift meets one of the gift ban exceptions. N. C. G. S. § 120C­303(
a). There is no “ nominal” or small­gift
exception to the general gift ban. A gift is defined as anything of monetary value given or received without
valuable consideration by or from a lobbyist or lobbyist principal, with certain exceptions. N. C. G. S. § 138A­3(
15). 23
Accordingly, pursuant to the statute, a free ride in a rental vehicle would constitute a “ gift” if not paid for. A
free ride from the airport to the hotel would have to meet a gift ban exception for the lobbyist to be able to
give it and for the designated individual to be able to accept it.
N. C. G. S. § 138A­32(
e) lists a number of specific gift ban exceptions. One of these listed gift ban exceptions
applies to gifts given for fraternal or personal reasons and not given for the purpose of lobbying. N. C. G. S. §
138A­32(
e)( 10). This gift ban exemption excludes,
Gifts given or received as part of a business, civic, religious, fraternal,
personal, or commercial relationship not related to the person’s public service
or position and made under circumstances that a reasonable person would
conclude that the gift was not given for the purpose of lobbying.
Based on the lobbyist��s fraternal and personal relationship with this designated individual, which is not
related to the designated individual’s public service and position, and the fact that the lobbyist was giving
the ride based on this relationship and not for the purpose of lobbying, the 138A­32(
e)( 10) gift ban exception
applied to this situation. Therefore, the lobbyist could give and the designated individual could accept the
ride without paying for it. However, the lobbyist would need to report the value of the ride on the lobbyist
reports that are filed with the Secretary of State’s Office covering the time period that the ride was given.
N. C. G. S. § 120C­402.
22 “ Designated individuals” include legislators, legislative employees, and public servants. N. C. G. S. §
120C­100(
a)( 2). The designated individual here is a legislator.
23 On August 9, 2007, House Bill 1111 was signed into law. Section 21 of HB 1111 amended N. C. G. S. §
138A­3(
15) and clarified that the definition of gift included anything of monetary value given or received
without valuable consideration by or from a lobbyist, lobbyist principal, legislative liaison personnel or a
person described under N. C. G. S. § 138A­32(
d)( 1), ( 2), or ( 3) ( changes in italics). Section 21 of HB 1111 is
effective October 1, 2007.
N. C. Ethics Commission 17
The Lobbying Law requires lobbyists to report, among other things, the fair market value or face value, if
shown, of all gifts given under the N. C. G. S. § 138A­32(
e)( 10) gift ban exception. N. C. G. S. § 120C­401(
b)
and 402( b)( 4). 24 There are a number of ways one could determine the fair market value of the ride to the
hotel, including, but not limited to, using the cost of the airport shuttle to the hotel, the amount of a cab fare
to the hotel, or the IRS mileage rate for the number of miles from the airport to the hotel. Determining the
fair market value of the ride would be the lobbyist’s decision based on the applicable facts.
AO­L­07­0007
Gift to a Non­Covered
Spouse of a Public Servant – “ Indirect” Gifts & Reporting Requirements.
G. S. 138A­32(
c) & ( d) ; 120C­100(
a)( 12), ­400,
­402,
­403
July 12, 2007
Legal counsel for a lobbyist principal organization (“ the Organization”) requested a formal advisory opinion
on whether the Organization could pay travel and meal expenses for the spouse of a public servant
associated with the spouse’s speaking engagement at an Organization conference and if so whether the
Organization would have to report the value of such expenditures to the Secretary of State’s office. The
spouse is not covered under the State Government Ethics Act, Chapter 138A of the North Carolina General
Statutes (“ N. C. G. S.”).
The Organization has hired a lobbyist and is therefore a lobbyist principal pursuant to N. C. G. S. Chapter
120C, the Lobbying Law. The Organization is hosting a conference. It has invited the spouse of a covered
public servant to be a featured speaker at this conference. As a result, the Organization would like to pay or
reimburse this person’s travel expenses ( possibly including airfare) and meals in conjunction with this
speaking engagement. The Organization will not provide him or her with any honorarium or other monetary
payment.
Under these facts, the Organization may provide, and the spouse may accept, travel and meals in conjunction
with the speaking engagement. As stated above, the Organization is a lobbyist principal. N. C. G. S. § 120C­100
( a) ( 11). As a general rule, lobbyist principals may not give, either directly or indirectly, gifts to
“ designated individuals,” unless an exception applies. N. C. G. S. § 120C­303(
a). Designated individuals
include “ public servants.” N. C. G. S. § 120C­100(
a)( 2). Public servants include a broad group of public
officials. N. C. G. S. § 138A­3
( 30) a. On the other hand, public servants cannot accept gifts from lobbyist
principals unless an exception applies. N. C. G. S. § 138A­32(
c).
Even though several exceptions to the general gift ban may apply in this situation, they do not need to be
discussed as the spouse is not a covered public servant under the ethics or lobbying laws, and neither law
directly extends the general gift ban to spouses. However, the gift ban does apply to indirect as well as direct
gifts. Thus, the Organization and the covered public servant must be mindful of any gifts given to the public
servant’s spouse that a reasonable person would attribute to the covered public servant.
24 At the time this opinion was initially issued, the reporting threshold for 138A­32(
e)( 10) independent
relationship exceptions was from the first penny ($. 01) for lobbyists. However, HB 1111 also amended
120C­402(
b)( 4) to increase the reporting threshold for these reportable expenditures to gifts with a value of
more than ten dollars ($ 10.00). See section 41.( b) of HB 1111, retroactively effective January 1, 2007.
Depending upon the value of the ride in this situation, this may impact the requester’s reporting obligation.
If the value of the ride was $ 10 dollars or less, it would not have to be reported.
N. C. Ethics Commission 18
That is not the case here. Reimbursement of the spouse’s travel expenses and meals involved here cannot
reasonably be construed to benefit the public servant. The greater risk in that regard would likely be tangible
items of significant monetary value or gifts that would benefit the public servant, either solely or along with
his or her spouse.
The much more difficult question has to do with whether this “ gift” to the covered person’s spouse needs to
be reported. No it does not. Independent gifts such as these that are not for the purpose of lobbying,
including “ goodwill lobbying,” do not need to be reported to the Secretary of State’s office pursuant to the
Lobbying Law.
As stated, the Organization is a lobbyist principal and therefore subject to all applicable provisions of the
Lobbying Law, including the obligation to report all “ reportable expenditures made for the purpose of
lobbying.” N. C. G. S. § 120C­400
and Article 4 as a whole. A “ reportable expenditure” includes,
Any advance, contribution, conveyance, deposit, distribution, payment, gift, retainer, fee, salary,
honorarium, reimbursement, loan, pledge, or thing of value greater than ten dollars ($ 10.00) per
designated individual per single calendar day.
N. C. G. S. § 120C­100(
a)( 12). Note that the definition of reportable expenditure encompasses much more than
just “ gifts” and does not say that these things have to be “ for the purpose of lobbying.” More significantly
for present purposes, it also includes any of these “ things of value” that are given, directly or indirectly, to
the designated individual “ or that individual's immediate family member.” So under normal circumstances,
reportable expenditures include gifts to immediate family members.
Section 120C­403
sets out the reporting requirements for lobbyist principals, and includes,
( 1) All reportable expenditures made for the purpose of lobbying [ and]
* * * * *
( 5) All reportable expenditures for gifts given under G. S. 138A­32(
e)( 1) ­(
9) and all gifts
given under G. S. 138A­32(
e)( 10) with a value of more than two hundred dollars ($ 200.00).
N. C. G. S. § 120C­403(
b)( 1) & ( 5). 25 Thus, lobbyist principals must report the vast array of “ reportable
expenditures” listed in § 120C­100(
a)( 12) if they are “ made for the purpose of lobbying,” and comprehensive
reporting in this situation makes perfect sense – virtually anything given for the purpose of lobbying should
be reported. On the other hand, only one part of the spectrum of reportable expenditures must be reported
under subsection ­403(
b)( 5): gifts given under the 138A­32(
e) exceptions.
“ Gifts given under” the 138A­32(
e) exceptions are, by definition, gifts given to certain delineated people
( public servants, legislators, and legislative employees) by certain delineated people ( lobbyists, lobbyist
principals, or “ interested persons” 26 ). Thus, the gifts provisions of 138A­32(
c), ( d), & ( e) do not apply to the
25 This is almost identical to the reporting obligations of lobbyists as set forth in N. C. G. S. § 120C­402,
with
the exception of the $ 200 reporting threshold for § 138A­32(
e)( 10) gifts given by lobbyist principals.
26 Section 138A­32(
d) prohibits public servants from accepting gifts from persons whom the public servant
knows or has reason to know ( 1) are doing or seeking to do business with the public servant’s employing
entity; ( 2) are engaged in activities that are regulated or controlled by the public servant’s employing entity;
or ( 3) have financial interests that may be substantially and materially affected by performance of the public
N. C. Ethics Commission 19
giving of gifts to spouses or other family members, unless an indirect gift to the designated individual is
implicated. See discussion above.
In this case, any gifts to the non­covered
spouse are in his/ her own right, and he/ she is not a covered person
under the Ethics Law. As stated above, reimbursement of the travel expenses and meals involved here
cannot reasonably be construed to benefit the covered public servant. Nor would a reasonable person
conclude that the gift was for the purpose of lobbying. Consequently, the Organization does not need to
report these items to the Secretary of State’s office pursuant to N. C. G. S. § 120C­403.
27
In conclusion, the Organization may provide, and the non­covered
spouse may accept, travel and meals in
conjunction with the speaking engagement, and the Organization does not have to report the value of these
gifts to the Secretary of State’s office.
AO­L­07­0008
Lobbyists Contributing to a Political Action Committee (“ PAC”).
G. S. 120C­302
May 25, 2007
A member of a Political Action Committee (“ PAC”) asked whether lobbyists could continue to make
contributions to the PAC in light of the new State Government Ethics Act ( Chapter 138A) and the Lobbying
Law ( Chapter 120C). The Lobbying Law controls the present question.
The PAC was formed by individuals with a particular interest in certain public policy issues in North
Carolina. Those same individuals contribute to the PAC from time to time. The PAC intends to make
financial contributions to candidates for elected office from time to time and to other entities who may
lawfully accept contributions from a State PAC. The decisions as to when and to whom such contributions
may be made will not be directed or controlled by any individual. Instead, all of those who have contributed
to the PAC will be entitled and encouraged to participate in such decisions, and such contributions will be
made based on the will of these contributors. Other than making contributions to candidates or their
committees, the PAC is not and shall not be directly affiliated with any candidate, nor shall it be controlled
by or directed by any candidate. Further, the PAC specifically is not and will not be directed or controlled
by any lobbyists except to the extent that such lobbyists may be entitled as contributors to have their
preferences considered like any other contributor to the PAC.
Pursuant to N. C. G. S. § 120C­302(
a) of the new Lobbying Law, no lobbyist may make a contribution as
defined in N. C. G. S. § 163­278.6
to a candidate who is a legislator or a member of the Council of State or to
that candidate’s campaign committee as defined under N. C. G. S. § 163­278.38Z.
The definition of legislator
and Council of State member under Chapter 120C also includes individuals who have filed a notice of
candidacy or a petition requesting to be a candidate for such office with the Board of Elections or has been
certified as a nominee of a political party for a vacancy, or otherwise qualified as a candidate in a manner
servant’s official duties. Commission staff calls these people “ interested persons,” but that is not a statutory
term.
27 It should be noted that this is a very fact­specific
determination. It involves a non­covered
person
receiving gifts that are not for the purpose of lobbying ( including “ goodwill lobbying”) and which cannot be
deemed an indirect gift to the covered­person
spouse.
N. C. Ethics Commission 20
authorized by law. N. C. G. S. § 120C­104.
Contribution is broadly defined under N. C. G. S. § 163­278.6
to
include, among other things, any conveyance, deposit, distribution, transfer of funds, payment, gift, pledge
or subscription of money, or anything of value whatsoever. Under N. C. G. S. § 120C­302(
a), a candidate’s
campaign committee means any political committee or political action committee organized by, or under the
direction or control of, the candidate.
There is no prohibition on lobbyists giving contributions to political committees or political action
committees that are not organized by or under the direction or control of the candidate as long as the lobbyist
does not specifically earmark his or her contribution to the independent political committee or political
action committee to go to a North Carolina General Assembly legislative candidate or Council of State
candidate.
Under the facts presented, registered lobbyists would be allowed to make contributions to the PAC and such
contributions would not violate the Ethics Act.
The Board of Elections should also be contacted regarding whether such contributions are allowed under the
Board of Elections statutes, policies, and procedures.
AO­L­07­0009
City’s Reception for Local Legislative Delegation – Gifts & Exceptions; “ Public Event” Exception; Local
Government Officials Performing Official Duties Exempt from Lobbying Law.
G. S. 138A­32;
138A­32(
e)( 1) ; 138A­3(
29)
June 7, 2007
A city attorney requested an advisory opinion on several questions, including whether a city in North
Carolina (“ City”) could host and pay for a reception for the City’s legislative delegation and whether certain
City officials, including the Mayor, City Manager, and City Attorney, were exempt from the new Lobbying
Law, Chapter 120C of the North Carolina General Statutes (“ N. C. G. S.”), when acting solely in connection
with their official duties.
The City, a municipal corporation, through its elected Mayor, appointed City Manager, and appointed City
Attorney, wants to host and pay for a reception for the City’s municipal legislative delegation. There are no
outside sponsors funding this event. It is anticipated that as to covered persons under the State Government
Ethics Act ( Chapter 138A) and the Lobbying Law ( Chapter 120C), only legislators would be invited.
Beverages and light food would be provided for immediate consumption. Participation of the Mayor, City
Manager, and City Attorney would be solely in connection with their public duties, and each is a duly
elected or appointed official. The City has not hired an outside lobbyist, does not have an internal lobbyist
on staff, and is not a registered lobbyist principal under the Lobbying Law.
Based upon these facts, the City may host its legislative reception, and its duly elected or appointed officials
and employees ( including the Mayor, City Manager, and City Attorney) are exempt from the requirements of
the Lobbying Law, except for certain limited reporting requirements set out in Article 8 of Chapter 120C. 28
28 If a designated individual ( e. g., a legislator) accepts a reportable expenditure made for the purpose of
lobbying, with a total value of over two hundred dollars per calendar quarter, from a “ person” exempted or
not otherwise covered by Chapter 120C, the “ person” making the reportable expenditure must report it to the
N. C. Ethics Commission 21
Legislative Reception
Unless a specific exception applies, lobbyists, lobbyist principals, and liaison personnel cannot give gifts to
legislators, and legislators cannot accept them. N. C. G. S. § 120C­303
& § 138A­32.
29 The City is neither a
lobbyist nor a lobbyist principal, and there are no lobbyist/ lobbyist principal sponsors of this event.
Likewise, local units of government are exempt from the liaison personnel requirement of Article 5 of the
Lobbying Law. N. C. G. S. 120C­500(
a). Therefore, the gifts restrictions of § 120C­303
& § 138A­32
do not
apply in this situation, and the City may give, and legislators may accept, food and drinks at the planned
legislative reception.
As a result of the foregoing, the City does not need to rely upon the food and beverages for immediate
consumption at a “ public event” exception of N. C. G. S. § 138A­32(
e)( 1) and § 138A­3(
29). If so, the
exception would apply to an organized gathering to which a municipal legislative delegation is invited
provided the other requirements of § 138A­3(
29) a. 2 are met, one of which is that at least 10 individuals
associated with the “ person” ( here, the City) actually attend the event. Another possible § 138A­3(
29) a. 2
exception is if the entire municipal legislative delegation is invited and “ the person is a governmental body
and the gathering is subject to the open meetings law.” N. C. G. S. § 138A­3(
29) a. 2. III. Again, the City does
not need to rely upon these exceptions for the reasons discussed above.
Local Government Officials Performing Official Duties
In addition, the Mayor, City Manager, and City Attorney’s participation would solely be in connection with
their public duties, and each is a duly elected or appointed official. These municipal officials fall under the
general exemption of N. C. G. S. § 120C­700(
3).
Except as otherwise provided in Article 8 of the Lobbying Law ( miscellaneous reporting provisions for
persons exempt or not otherwise covered by the Law), the provisions of Chapter 120C shall not be construed
to apply to,
A duly elected or appointed official or employee of … a county, municipality, school district, or
other governmental agency, when appearing solely in connection with matters pertaining to the office
and public duties….
N. C. G. S. § 120C­700(
3).
The first question then is whether the City’s Mayor, Manager, and Attorney are “ duly elected or appointed
officials or employees.” The Mayor is obviously duly elected and covered by this provision. The City
Manager and City Attorney are duly appointed by the city council. See, e. g., N. C. G. S. § 160A­147
( appointment of city manager) ; § 160A­173
( appointment of city attorney) ; see also § 153A­114
( appointment
of county attorneys). Both city and county managers and attorneys are “ officials” for purposes of this
provision of the Ethics Act. See, e. g., § 128­1.2.
This would include both “ in­house”
attorneys ( those hired
Secretary of State’s office. See N. C. G. S. § 120C­800(
a). Other requirements apply for out­of­state
reportable
expenditures.
29 Again, only legislators will be invited to the reception ­­no
“ public servants” as defined in the Ethics Act.
See N. C. G. S. § 138A­3(
30). [ Note: This opinion was issued prior to the passage of House Bill 1111 ( Session
Law 2007­348)
which amended the definition of “ person” to expressly exclude political subdivisions of the
State, among others. HB 1111, section 23, amending 138­3(
27).
N. C. Ethics Commission 22
by the City as employees) and any outside counsel hired as an independent contractor, as long as all other
requirements of this provision are met ( see below). 30
The second requirement is that these officials and employees must be appearing “ solely in connection with
matters pertaining to the office and public duties” ( emphasis added). Thus, if local government officials or
employees engage in independent lobbying activities not associated with or connected to their public office
and duties, they may fall within the coverage of the Lobbying Law and be required to register, report, and
fulfill all other necessary requirements of Chapter 120C.
Thus, the § 120C­700(
3) exemption applies to the City Mayor, City Manager, and City Attorney, as well as
any other similarly­situated
elected or appointed local government officials. As a general matter, local
elected and appointed officials and employees are exempted from most provisions of the Lobbying Law as
long as they are performing their official duties, and subject to the possible reporting requirements
mentioned above.
AO­L­07­0010
Lobbyists’ and Lobbyist Principals’ Sponsorship of Events Held In Conjunction With Legislative
Conferences; “ Public Event” Gift Ban Exception.
G. S. 138A­32(
e)( 1) ; 138A­3(
29)
November 28, 2007
A lobbyist for a lobbyist principal requested an opinion regarding one or more lobbyist principals and/ or
lobbyists sponsoring events at which food and beverages would be provided to legislators and legislative
employees. Usually these events occur in conjunction with legislative conferences that the legislators are
attending, but they are not actually part of the formal agendas of these conferences.
In the past, the requester lobbyist principal has handled all of the arrangements for these events. In
particular, it has made the reservations and paid for the meals and beverages and then sought reimbursement
or contributions from other entities, many of which are lobbyist principals, which wish to participate in the
funding of these events. The initial request asked about application of the new Lobbying Law ( Chapter
120C) to three separate events being held in conjunction with three separate legislative conferences.
More specifically, the requester lobbyist principal and at least 20 other sponsors planned to host each of the
specific events. There would be more than 20 individuals associated with the group of sponsoring lobbyist
principals and lobbyists in attendance at each separate event. All members of the North Carolina General
Assembly and at least 10 legislative employees were being invited to each of these events. The requester
lobbyist principal and the other hosting sponsors planned to only give food and beverages for immediate
consumption to all of the legislators and legislative employees who attended the events.
The new Lobbying Law applies to lobbyists, lobbyist principals, and legislative liaison personnel and
generally prohibits them from giving “ gifts,” directly or indirectly, to designated individuals ( legislators,
legislative employees, and public servants), unless an exception applies. The new State Government Ethics
30 While not at issue in this opinion, this same analysis would likely apply to the other types of local
government employees and officials listed in § 128­1.2:
acting city and county managers, interim city and
county managers, finance officers, clerks, and deputy clerks. This is not an exclusive list.
N. C. Ethics Commission 23
Act prohibits the same designated individuals from knowingly accepting a “ gift,” directly or indirectly, from
a lobbyist, lobbyist principal, or legislative liaison personnel, unless an exception applies. N. C. G. S. § 138A­32(
c). Both laws use the same gift ban exceptions, which are listed in N. C. G. S. § 138A­32(
e).
Because the requester here and many of the other sponsors of these events are lobbyists or lobbyist
principals, for these companies and individuals to be able to participate in the funding of the events in
question, including providing free meals and beverages to legislators and legislative employees, a gift ban
exception under N. C. G. S. § 138A­32(
e) must be met.
Based on the facts presented here, there is an applicable gift ban exception that would allow the requesting
lobbyist principal and the other lobbyist/ lobbyist principal sponsors to give food and beverages to the
legislators and legislative employees at these specific events. N. C. G. S. § 138A­32(
e)( 1) allows lobbyists
and lobbyist principals to give food and beverages for immediate consumption at a “ public event.” Public
event is defined in N. C. G. S. § 138A­3(
29). Prior to the passage of House Bill 1111 ( Session Law 2007­348)
on August 9, 2007, the definition of “ public event” had two separate subsections, one for legislators and
legislative employees, and another for public servants. If both legislators and public servants were invited to
a prospective public event, all requirements of both subsections had to be met in order satisfy this exception,
including who must be invited to the organized gathering. 31 N. C. G. S. § 138A­3(
29) a. 1 applied to events
which were open to the general public. The events in question here are not open to the general public;
therefore, N. C. G. S. § 138A­3(
29) a. 1 was not applicable.
However, these three specific events met the definition of “ public event” for legislators under N. C. G. S. §
138A­3(
29) a. 2. N. C. G. S. § 138A­3(
29) a. 2 had a two­pronged
test. 32 The first prong is that the “ person”
sponsoring the event must invite either the entire membership of the House of Representatives or of the
Senate, or the entire membership of one of the statutorily­listed
legislative subgroups. Since the entire
General Assembly was invited, the first prong of N. C. G. S. § 138A­3(
29) a. 2 was met.
Commission staff has determined that invitations under the Ethics Act and the Lobbying Law must be in
writing ( e­mails
are included as a written invitation), be sent out at least ten ( 10) days in advance of the
event, state the date, time and location of the event, identify the event, and list the names of the sponsors of
the event. Thus, the sponsoring lobbyist principals and lobbyists must be identified and known prior to the
event occurring.
31 Section 24 of House Bill 1111 ( Session Law 2007­348)
amended the definition of “ public event” under
N. C. G. S. § 138A­3(
29) and eliminated the two separate subsections ( one for legislators/ legislative
employees and one for public servants). Pursuant to the new legislative changes, there are now five
definitions of “ public event” under N. C. G. S. § 138A­3(
29), and if the sponsoring person and their/ its event
meet all of the requirements of any one of these five definitions, the event is a public event for all covered
attendees ( legislators, legislative employees, and public servants). Thus it is no longer necessary to meet
both sets of requirements.
32 The amended definition of “ public event” ( section 24 of HB 1111) renumbered § 138A­3(
29) a. 2 as §
138A­3(
29) b. The two­pronged
test contained in § 138A­3(
29) a. 2 remains under new § 138A­3(
29) b.
N. C. Ethics Commission 24
After meeting this first invitation prong, a second prong must also be met. This second prong of N. C. G. S. §
138A­3(
29) a. 2 33 can be met in three ways, depending upon who/ what is determined to be the “ person”
holding the organized gathering. The three ways are as follows:
( I) at least 10 individuals associated with the person actually attend, other than the legislator or
their immediate family; or
( II) all shareholders, employees, board members, officers, members, or subscribers of the person located
in North Carolina are notified and invited to attend; or
( III) the person is a governmental body and the gathering is subject to the open meetings law.
Under Chapter 138A, “ person” is broadly defined to include an individual, any business entity, committee,
association, or any “ group of persons acting together.” N. C. G. S. § 138A­3(
27). The requesting lobbyist
principal here and the other hosting lobbyists and lobbyist principals were acting as a group when
sponsoring each of these events.
As stated above, one of the ways to meet the second prong of § 138A­3(
29) a. 2 is for at least 10 individuals
associated with the “ person” ( here the lobbyists and lobbyist principals sponsoring the particular event) to
actually attend that event. The initial request stated that more than 20 individuals associated with the group
of lobbyists and lobbyist principals ( the “ person”) sponsoring each particular event would actually attend
each event.
The determination of who/ what is the “ person” holding the organized gathering becomes more complicated
when the event is being sponsored/ funded by a number of lobbyist principals and lobbyists, rather than just
one. The Commission has decided that for the purposes of meeting subsection I of § 138A­3(
29) a. 2, 34 the
“ person” referenced in subsection I is the “ group” of lobbyists and lobbyist principals sponsoring the event
(“ group of persons acting together”).
Therefore, for the events in question here, each sponsoring lobbyist and lobbyist principal did not have to
have 10 individuals associated with them individually actually attend the event to meet subsection I. Rather,
the group of lobbyists and lobbyist principals sponsoring each event was the “ person” and, therefore, the
group only had to have a total of 10 individuals associated with the group of sponsoring lobbyists and
lobbyist principals actually attend the event in question. 35
33 N. C. G. S. § 138A­3(
29) a. 2 is now § 138A­3(
29) b.
34 Subsection I of N. C. G. S. § 138A­3(
29) a. 2 is now renumbered as subsection 1 of § 138A­3(
29) b.
35 For example, if five lobbyist principals co­sponsor
an event, each sponsoring lobbyist or lobbyist principal
can have two people actually attend the event for a total of 10 attendees. Alternatively, all 10 actual
attendees could be associated with just one of the sponsoring lobbyists or lobbyist principals. Any other
combination of numbers from the group of sponsoring lobbyists and lobbyist principals ( the “ person”) would
also suffice as long as at least 10 individuals associated with the group of sponsoring lobbyists and lobbyist
principals actually attend the particular event.
N. C. Ethics Commission 25
Based upon the particular facts presented here, the second prong of § 138A­3(
29) a. 2 was met, as long as the
sponsoring lobbyists and lobbyist principals were identified prior to the particular event being held. 36 This is
necessary to establish that at least 10 individuals associated with the “ person” ( the group of sponsoring
lobbyists and lobbyist principals) hosting a particular event actually attend that event. Therefore, the
requesting lobbyist principal here and the other lobbyists and lobbyist principals co­sponsoring
each of the
events in question could give legislators and legislative employees food and beverages for immediate
consumption at these events under the “ public event” gift ban exception of § 138A­32(
e)( 1). 37
All of the events in question were for the purpose of lobbying. 38 This made the entire cost of each event a
reportable expenditure for the purpose of lobbying. Therefore, the entire cost of each event needed to be
reported to the Secretary of State’s Office. Each sponsoring lobbyist and lobbyist principal was required to
report the total amount that they gave to sponsor each event and also determine the fair market value of the
food and beverages gift given to the legislators and their immediate family member( s). The food and
beverages provided to each legislator and their immediate family members were § 138A­32(
e)( 1) gifts that
needed to be reported if the fair market value exceeded $ 10.00 per calendar day per legislator or immediate
family member. N. C. G. S. § 120C­402(
b)( 4) and § 403( b)( 5). The food and beverage component needed to
be reported on a per­legislator
basis with the receiving family member( s) listed separately. N. C. G. S. §
120C­401(
b). The remaining amount of a sponsor’s sponsorship money needed to be reported under the
proper category of reportable expenditures per N. C. G. S. § 120C­401(
c).
36 Note that if the sponsoring lobbyist principals cannot meet subsection I, then they must meet subsection II
of N. C. G. S. § 138A­3(
29) a. 2. The “ group” analysis used above for subsection I cannot be used by the
sponsoring lobbyist principals here to meet subsection II of § 138A­3(
29) a. 2, based upon the language of
subsection II and the fact that this group of sponsoring lobbyist principals consists of separate entities with
separate shareholders, employees, officers, etc. Accordingly, to meet the second prong of § 138A­3(
29) a. 2
through subsection II, each sponsoring lobbyist principal would need to notify and invite all of their
shareholders, employees, board members, officers, members or subscribers located in North Carolina.
Pursuant to section 24 of HB 1111, subsection II of § 138a­3(
29) a. 2 has been renumbered as subsection 2 of
§ 138A­3(
29) b.
37 Note that section 38 of HB 1111 amended G. S. 138A­32(
e)( 3) so that as of October 1, 2007, the 138A­32(
e)( 3)( iii) gift ban exception applies to reasonable and actual expenditures for food, beverages,
transportation, and incidental entertainment provided to a legislator or legislative employee either as part of
the meeting of a non­partisan
state, regional, national or international legislative organization of which the
General Assembly, the legislator, or the legislative employee is a member or at an event held in conjunction
with a meeting of such a non­partisan
state, regional, national or international legislative organization if all
of the other requirements and conditions contained in 138A­32(
e)( 3) are met.
38 Under N. C. G. S. § 120C, the definition of “ lobbying” includes both “ direct” lobbying and “ goodwill”
lobbying. Direct lobbying is influencing or attempting to influence legislative or executive action, or both,
through direct communication or activities with a designated individual or that person’s immediate family.
N. C. G. S. § 120C­100(
a)( 9) a. Goodwill lobbying is the developing of goodwill through communications or
activities, including the building of relationships, with a designated individual or that person’s immediate
family with the intention of influencing current or future legislative or executive action, or both. N. C. G. S. §
120C­100(
a)( 9) b.
N. C. Ethics Commission 26
AO­L­07­0011
Members of State Board Lobbying Members of Congress; “ Liaison Personnel.”
G. S. 120C­500(
a), ( b), and ( c)
October 3, 2007
A Licensing Board (“ the Board”) asked whether, pursuant to the new Lobbying Law ( Chapter 120C) and the
new State Government Ethics Act ( Chapter 138A), its members could lobby North Carolina members of the
United States Congress and members of the North Carolina General Assembly. Specifically, Board members
inquired whether they could lobby North Carolina members of the United States Congress with regard to
issues related to their Board and its professional organization.
Both the Ethics Act and the Lobbying Law apply to North Carolina legislators who are members of, or
candidates for, the North Carolina General Assembly. N. C. G. S. § § 138A­3(
22) and 120C­104.
The Ethics
Act and the Lobbying Law do not apply to North Carolina members of the United States Congress.
Accordingly, any requirements or prohibitions under these state laws do not pertain to lobbying members of
the United States Congress. Therefore, unless prohibited by federal or other law, the Board’s members may
lobby North Carolina members of the United States Congress.
Since the Board is a state board with non­advisory
authority, it and all of its voting members ( including ex­officio
members) are covered under the Ethics Act and the Lobby Law. Accordingly, the requirements and
prohibitions of these laws do apply when the Board wants to lobby members of the North Carolina General
Assembly. Prior to August 9, 2007, the Lobbying Law required all covered state boards to designate at least
one, but not more than two, liaison personnel to conduct the board’s lobbying of members of the North
Carolina General Assembly for legislative action. N. C. G. S. § 120C­500(
a) and ( c). As of August 9, 2007,
if a state board does not have staff, it does not have to designate liaison personnel to lobby for legislative
action. 39 However, if the board designates liaison personnel, the designated liaison personnel must register
and report with the Secretary of State’s Office pursuant to N. C. G. S. § 120C­402
and comply with the
sections of the Ethics Act and Lobby Law that are applicable to liaison personnel. See N. C. G. S. § 120C­501(
b), ­(
c), ­(
d), and ­(
e).
In addition, prior to the signing of House Bill 1110 on August 9, 2007, no state funds could be used by
covered state boards, to contract with persons who were not State employees to lobby legislators or
legislative employees. N. C. G. S. § 120C­500(
b). 40 Section 6.( a) of HB 1110 amended § 120C­500(
b) to
allow state funds to be used to pay counsel employed under N. C. G. S. § 147­17
to lobby legislators and
legislative employees for legislative action.
39 See Section 6.( a) of House Bill 1110 ( Session Law 2007­347).
40 See Section 6.( a) of House Bill 1110 and N. C. G. S. § 147­17.
Section 147­17
provides for the employment
of legal counsel by State departments, agencies, etc., under certain circumstances.
N. C. Ethics Commission 27
AO­L­07­0012
International Study Trip & the “ Educational Meeting” Gift Ban Exception.
G. S. 120C­303(
a) and ( b), and 138A­32(
e)( 3)
October 29, 2007
A lobbyist principal organization and a non­lobbyist
principal organization inquired whether they could pay
various travel and related expenses for certain legislators and public servants, considered to be
“ policymakers” in areas related to the trip, to participate in an international study. Specific questions
included ( 1) whether the organizations’ international study trip qualified as an “ educational meeting” under
the State Government Ethics Act ( Chapter 138A) and the Lobbying Law ( Chapter 120C) and ( 2) whether the
organizations are allowed to pay the travel­related
expenses of this international study trip, which includes
travel, lodging, and food expenses, and other incidental expenses of nominal value connected to this trip, for
these legislators and public servants.
I. Overview of the Facts
One sponsoring organization is a lobbyist principal. The other is not. All of the money for this international
study trip, including the money for the travel­related
costs of the invited legislators and public servants
determined to be “ policymakers,” is given to the lobbyist principal organization in the form of grants from
two different private philanthropic foundations, neither of which is a lobbyist principal. The money is given
by these two private foundations to be used for this international study trip with no conditions or
requirements attached. The two foundations have no involvement in the planning, administration, or
coordination of the trip. The two foundations make no decisions regarding the trip and have no input as to
the selection of the participants.
The two sponsoring organizations plan, administer and coordinate the entire trip. They determine and select
the individuals who will be invited to participate in this trip and only pay for the travel­related
costs of the
participants who have been determined to be “ policymakers.” The other invited participants must pay for
their own travel­related
costs of this trip. The only invited participants who have been determined to be
“ policymakers” are North Carolina legislators and public servants as defined under N. C. G. S. § 138A­3(
30).
Legislators and these public servants are “ designated individuals” under the Lobbying Law. N. C. G. S. §
120C­100(
a).
The two sponsoring organizations have sponsored previous international study trips, and the participants for
all of these previous trips have been invited based on their positions, both public and private. The
participants for the current trip are also being invited based on their positions. Accordingly, many of the
participants being invited on this trip have been on previous international trips sponsored by these
organizations. The “ policymakers” identified and invited on this trip consist of both legislators and public
servants.
The purposes of this international trip are to study another country’s governmental institutions and systems,
with an emphasis on examining particular areas, including math and science, and to examine how the
country has merged its governmental institutions and systems with the economic development of the
country, and the benefits of such merger. This study and examination will be conducted and accomplished
by visiting governmental institutions and systems, and private businesses and companies; and meeting and
discussing with leaders and employees of governmental institutions and systems, business and company
representatives, and members of the general public who use these governmental institutions and systems
and/ or who may be affected by these governmental institutions and systems merging and integrating with the
N. C. Ethics Commission 28
economic development of the country. This study process will also include examining the country’s
approach to identifying leaders in particular areas of its governmental institutions and systems, and the
methods it uses to teach and train these identified leaders. The destination was chosen as the subject of this
trip for five major reasons:
( 1) its educated population are top performers in math and science;
( 2) it is a world leader in using technology as an educational and economic tool;
( 3) its governmental institutions and entities succeed with very diverse populations;
( 4) it has a “ grow your own leadership” approach; and
( 5) it considers education a foundation block in building stronger governmental institutions, entities,
and businesses, and has an integrated approach to planning for education and economic
development.
The itinerary for this international study trip, excluding travel time to and from the ultimate destination,
spans six days. These six days consist of 73.5 hours of non­sleeping
time. Of these 73.5 hours, 40.5 hours
are scheduled for educational time, 6.5 hours of travel time from one educational event to another and back
to the hotel, and 26.5 hours for non­educational
time, such as free time, cultural site visits, museum visits
and tours. All of the participants, including the approximately 20 paying participants, may elect to stay the
final weekend of the trip. However, if any of the legislators, public servants, or any other participant who
may be covered under the Lobbying Law elects to remain in the destination city after the international study
trip has formally concluded, they will be responsible for all of their own expenses, including hotel, food,
transportation, entertainment and any other expenses they may incur prior to returning to North Carolina.
II. Applicable Law
The Lobbying Law applies to lobbyists, lobbyist principals, and legislative liaison personnel, as these terms
are defined in Chapter 120C. The Lobbying Law prohibits, among other things, a lobbyist, lobbyist
principal, or legislative liaison personnel from giving gifts ( including anything of monetary value), directly
or indirectly, to a designated individual ( legislators, legislative employees, and public servants) unless an
exception to the general gift ban applies. See N. C. G. S. § 138A­32(
e) for a list of the exceptions. Because one
of the sponsoring organizations is a lobbyist principal, for it to be able to pay for the travel­related
expenses
of this international study trip for legislators or public servants, a gift ban exception under N. C. G. S. § 138A­32(
e) must be met. The other sponsoring organization is not a lobbyist principal; therefore, the gift ban
contained in N. C. G. S. § 120C­303
is not applicable and the non­lobbyist
principal sponsoring organization
may give gifts to designated individuals, including legislators and public servants.
N. C. G. S. § 138A­32(
e)( 3)( i) permits a lobbyist principal to pay for the “ reasonable actual expenditures” of a
public servant, legislator, or legislative employee incurred in connection with the individual’s attendance at
an educational meeting “ for purposes primarily related to the public duties and responsibilities of the
covered person ….” Any food, beverages, transportation, or entertainment must be provided to all attendees
or defined groups of 10 or more attendees, and the meeting must ( a) be attended by at least 10 or more
participants; ( b) have a formal agenda; and ( c) be noticed at least 10 days in advance. Any entertainment
provided at the meeting “ must be incidental to the principal agenda of the meeting.” The educational
meeting exception allows a public servant, legislator, or legislative employee to accept “ reasonable actual
expenditures” for food, beverages, registration, travel, lodging, other incidental items of nominal value, and
incidental entertainment in connection with their attendance at the educational meeting.
N. C. G. S. § 120C­403(
b)( 5) requires each lobbyist principal to report, among other things, all reportable
expenditures made for the purpose of lobbying, all reportable expenditures for gifts given under any of the
N. C. Ethics Commission 29
gift ban exceptions of N. C. G. S. § 138A­32(
e) ( 1) – ( 9), ­(
e)( 11), ­(
e)( 12), 41 and all gifts given under the gift
ban exception of N. C. G. S. § 138A­32(
e)( 10) with a value of more than $ 200. The lobbyist principal reports
are to be filed with the Secretary of State’s Office quarterly when the General Assembly (“ GA”) is not in
session and monthly when the GA is in session. N. C. G. S. § 120C­403(
a) and ( c).
Accordingly, a sponsor that is a lobbyist principal and that is providing a gift allowed under the gift ban
exception of N. C. G. S. § 138A­32(
e)( 3) is required to report on its lobbyist principal report “ reasonable
actual expenditures” for food, beverages, registration, travel, lodging, other incidental items of nominal
value, and incidental entertainment in connection with the designated individuals’ attendance at the
educational meeting if the value of the expenditures is greater than $ 10 per day per individual legislator,
individual public servant, or that individual’s immediate family. N. C. G. S. § 120C­403(
b)( 5) and § 120C­100(
a)( 12) a.
A sponsor that is not a lobbyist principal and that is providing a gift allowed under the gift ban exception of
N. C. G. S. § 138A­32(
e)( 3) is required to report reportable expenditures made for the purpose of lobbying,
including gifts, if ( 1) the reportable expenditures given per individual legislator, individual public servant or
that person’s immediate family equal a total cumulative value of over $ 200 in a calendar quarter; ( 2) the
sponsor is located in North Carolina or the designated individual is in North Carolina when he/ she receives
the reportable expenditures; and ( 3) the reportable expenditures are not excluded from Article 8 of Chapter
120C by subsection ( e) of N. C. G. S. § 120C­800.
See N. C. G. S. § 120C��800.
III. Application of the Commission’s Educational Meeting Criteria
The Ethics Commission has adopted seven non­exclusive
criteria to be applied when determining what
constitutes an “ educational meeting” under N. C. G. S. § 138A­32(
e)( 3)( i) (“ Educational Meeting Criteria” or
“ Criteria”). 42 These Criteria are for guidance purposes only, and no one factor is controlling. The
determination as to whether a particular meeting, conference, or event is an “ educational meeting” under
N. C. G. S. § 138A­32(
e)( 3)( i) is for the Commission to determine based upon the specific facts presented
regarding the event. The Commission’s application of these Criteria to the international study trip presently
under consideration follows. 43
A. What is the meeting’s primary purpose? Is the primary purpose to influence or curry favor with a
public servant, legislator, or legislative employee with respect to executive or legislative action? Or, is the
meeting primarily intended to present information to enhance a person’s understanding of a subject matter or
for the purpose of self­improvement?
41 House Bill 1111 ( Session Law 2007­348)
added two new gift ban exceptions: 138A­32(
e)( 11) and ­(
12).
See Section 41 of HB 1111. These new gift ban exceptions are retroactive to January 1, 2007. See Section
44 of HB 1111.
42 [ Note: See AO­L­07­0001
and AO­L­07­0003
and Attachment A thereto.]
43 Because the participating legislators and public servants were only invited because they were
“ policymakers” in the relevant areas, the educational content of the meeting related to their specific duties
and responsibilities and satisfied the first educational meeting test: Is the educational content of the meeting
related to a specific public duty or responsibility of the public servant, legislator, or legislative employee?
See “ Criteria for Determining an ‘ Educational Meeting’ Under § 138A( e)( 3)( i).” Consequently, this opinion
begins with the “ primary purpose” analysis.
N. C. Ethics Commission 30
Meetings intended to influence rather than educate may include meetings that are directly related to an
upcoming official vote, recommendation, or other legislative or executive action. In determining the purpose
of the meeting, the Commission will consider whether the entity holding the meeting
· has legislation pending before the General Assembly or intends to request legislative action;
· is seeking to introduce legislation or impact executive action at the time of the meeting;
· will be impacted by upcoming actions or decisions of the public servant, legislator, or legislative
employee; or
· is holding the meeting for the purpose of advocating on behalf of legislative or executive action.
The lobbyist principal sponsoring organization here proposed several legislative initiatives during the 2007
General Assembly session. One included an education­related
pilot project that the organization had drafted
and resulted in both funding and operating responsibility for the organization. Another sought funding for a
program the organization administers. Thus, although the international study trip’s primary purpose is not to
influence legislative or executive action, or to advocate on behalf of legislative or executive action, the
organization’s position and priorities on both legislative and executive issues and actions are likely to be
discussed during the international study trip. So the trip appears to have a dual purpose: both to educate and
influence those participants whom the sponsoring organization considers key “ policymakers.”
B. What is the nature of the entity holding the meeting?
· Is the entity a State agency or governmental entity?
· Is the entity an educational institution?
· Is the entity an organization that routinely sponsors meetings with educational content?
· Is the entity holding the meeting a lobbyist principal?
The lobbyist principal is a North Carolina corporation with its membership consisting of elected officials,
both in the legislative and executive branches of North Carolina government, and others who also have the
power to affect and make public policy regarding particular issues and areas. The non­lobbyist
principal is
an entity of the state with 501( c)( 3) status when applying for grants. The non­lobbyist
principal does not
have a lobbyist and is not a lobbyist principal. Accordingly, the gift ban does not apply to the non­lobbyist
principal.
C. Is the lobbyist principal which is paying for the person’s attendance at the meeting also
sponsoring the meeting?
The lobbyist principal, along with the non­lobbyist
principal, is sponsoring the international study trip, but
only the lobbyist principal is paying for the travel­related
costs, including airfare and other necessary
transportation, lodging, meals, and other incidental items of nominal value connected to the study trip, of the
participants that it considers “ policymakers,” which are legislators and public servants. Note that the
lobbyist principal is not paying the travel­related
costs of the participants that it does not consider
“ policymakers.” These participants will pay a “ registration fee” which will cover their airfare, other
transportation, lodging, meals, and other incidental items of nominal value connected to the study trip.
N. C. Ethics Commission 31
D. What is the agenda for the meeting?
· Other than the speech or roundtable discussion in which the public servant, legislator, or
legislative employee is participating, what proportion of the individual events scheduled at the
meeting have a speaker, roundtable discussion, or other educational content?
· What proportion of those sessions is held in the absence of a meal or entertainment?
· What proportion of the meeting agenda includes meals or entertainment with formal educational
content?
· Does the agenda cover a wide range of topics or have a very limited, industry or client­specific
focus?
· Would the meeting take place regardless of whether the invited designated individual( s) attends?
· Who are the speakers?
· Are they associated with the lobbyist principal or its lobbyist?
· Are they independent experts in their field?
The “ meeting” here is a six­day
international study trip consisting of approximately 12­to
13­hour
days,
including educational time, personal time, lunch, dinner, and travel time. The itinerary includes time spent
on the purposes and goals of the study trip, travel to and from the various governmental entities, institutions,
and systems, private businesses and companies, and other necessary locations, and personal time for the
participants. The educational time includes: presentations on the history and culture of the country they are
studying; a political overview of the country; the relationship of the governmental entities, institutions and
systems with the country’s economic policies; visits to various governmental entities, institutions, and
systems with accompanying presentations, tours, discussions, and observation time; visits to various
companies and businesses with accompanying presentations and discussion with management and
employees; discussions with business professionals, educators, and members of the general public who use
and/ or may be affected by these governmental entities, institutions, and systems, and the merger and
integration of such with private businesses and companies for the economic development of the country. The
personal participant time includes guided tours of the country, optional cultural activities and visits, and
overall free time. Breakfast, lunch and dinner are included every day. The speakers are not associated with
the lobbyist principal and many may be deemed experts in their fields, whether that is in governmental
issues, public policy issues, education, business, economics or the link and interconnection of the country’s
governmental public policy issues and the economics of the country. A focus of the lobbyist principal is to
have legislators and public servant policymakers participate in this trip, and that is why the lobbyist principal
pays for the trip­related
costs and expenses of these “ policymakers.” The lobbyist principal has
acknowledged that this international study trip probably would not take place if these “ policymakers” did not
attend; however, a number of other individuals are expected to participate with each of them paying for the
trip.
E. Is the location of the meeting directly related to the meeting’s educational content?
· Is there a reason for holding the meeting in a location other than where the attendees live or
work?
· Is it necessary to the meeting’s educational purpose that an individual travel in connection with
the meeting?
· Is the meeting sponsored by a state, national, or international organization for the benefit of its
state, national, or international membership?
· Is the location of the meeting otherwise integral to the educational content of the meeting?
N. C. Ethics Commission 32
· Would an individual be capable of obtaining a comparable degree of educational information
through other means that would not require travel?
The lobbyist principal and the non­lobbyist
principal’s international study trip is being held in another
country. This country was selected as the location for this trip for five major reasons, all related to the
country’s governmental institutions and systems, with an emphasis on examining particular areas, including
math and science, and to examine how the country has merged its governmental institutions and systems
with the economic development of the country, and the benefits of such merger. Holding the trip in this
country is necessary for the lobbyist principal and the non­lobbyist
principal to meet the educational goals
they have set for this trip. Being in this country is integral to the educational content of the trip. For
example, the trip includes: visits and tours of this country’s governmental entities, institutions, and systems,
and of private businesses and corporations; meetings and discussions with the leaders and employees of
various governmental entities, institutions and systems of this country, business representatives, and
professionals, experts in various fields, educators, and members of the general public who use and/ or may be
affected by the interaction and integration of these governmental entities, institutions, and systems, and their
public policy issues with private businesses and corporations. An individual would not be capable of
obtaining a comparable degree of educational information through other means.
F. Is the length of the educational meeting reasonably necessary to fulfilling the educational
purpose of the trip?
The international study trip, including travel time to and from the country, will commence Friday and end a
week later on either Saturday or Sunday, depending on what day the participant decides to depart for North
Carolina. The formal itinerary for the trip commences on Sunday and ends the following Friday. The
majority of all of the days, except the travel days and the day they arrive in the country, is spent on
presentations, tours, visits and other activities related to the educational goals and purpose of this trip. The
length of the trip is not unreasonable in relationship to the educational goals and purpose of this trip, and the
travel time necessary due to the distance between North Carolina and the country.
G. What degree of personal benefit does the individual gain from attendance at the meeting?
· Does the personal benefit outweigh the public benefit gained by the educational value of the
meeting?
This “ meeting” involves an out­of­the­country
trip to a country that many people may wish to visit, but
which is not considered a common vacation destination. A majority of every day of this trip is being held in
various settings and locations with educational presentations, tours and discussions. It has significant
educational value. Therefore, the personal benefit in attending this international study trip would not
outweigh the public benefit gained by the educational value.
H. Are there other factors that would support the conclusion that the meeting is educational?
No other factors that would support the conclusion that the meeting is educational were identified.
IV. Conclusion
Based on the facts presented and the forgoing analysis, the Commission determined that the international
study trip satisfies the Commission’s educational meeting criteria and is an educational meeting pursuant to
N. C. Ethics Commission 33
N. C. G. S. § 138A­32(
e)( i). The facts presented also established that ( a) any food, beverages, transportation,
or entertainment that is being provided as part of this trip is being provided to all trip participants; ( b) the trip
has an established formal agenda; and ( c) notice of the trip has already been provided to interested
individuals, including both the paying participants and the “ educational policymaker” participants, thereby
meeting the requirement of at least 10 days advance notice. It is also the Commission’s understanding,
based on the facts that were provided, that any entertainment provided during this trip will be “ incidental to
the principal agenda of the meeting.”
Based on all of the foregoing conditions being met, this international study trip will meet the education gift
ban exception listed under N. C. G. S. § 138A­32(
e)( i) and the lobbyist principal sponsor will be allowed to
pay for the “ reasonable actual expenditures” of the legislators and public servants for food, beverages,
registration, travel, lodging, incidental items of nominal value, and incidental entertainment in connection
with their participation in this international study trip.
The lobbyist principal sponsor will need to report all of the “ reasonable actual expenditures” it pays in
connection with the designated individuals’ participation in this international study trip on its lobbyist
principal report that it files with the Secretary of State’s Office. The lobbyist principal sponsor will need to
report these expenditures on the principal report that it files with the Secretary of State’s Office for the first
quarter of 2008. N. C. G. S. § 120C­403(
a) and ( c).
It is the Commission’s understanding that the non­lobbyist
principal sponsor is not paying for any of the
expenditures of the designated individuals who are participating in this international study trip. Accordingly,
the non­lobbyist
principal sponsor is not giving anything of monetary value to the designated individuals
and, therefore, it has nothing to report.
N. C. Ethics Commission 34
“ ETHICS” OPINIONS – CHAPTER 138A
The Ethics Commission is the final authority for advisory opinions issued to public servants, lobbyists, and
lobbyist principals. For legislators, however, the Commission issues “ recommended advisory opinions”
pursuant to section 138A��13(
b), which the Legislative Ethics Committee then adopts, modifies, or overrules
according to section 120­104(
b). Once the Legislative Ethics Committee finalizes the legislative opinion and
edits it for publication, the Committee submits the final opinion to the Ethics Commission for publication.
The Commission may only publish the Committee’s formal advisory opinions.
Because of the recommendation and publication process for legislative opinions, there will be gaps in the
numbering system for the Commission’s “ ethics” advisory opinions. For example, the first published
“ ethics” advisory opinion is AO­E­07­0005.
AO­E­07­0005
Statement of Economic Interest Disclosure Requirements
G. S. 138A­22
and 138A­24
March 7, 2007
Legal counsel requested a formal advisory opinion concerning the Statement of Economic Interest (“ SEI”)
filing requirements. Responses to the specific questions asked, as numbered by the request, follow.
( 1) Since this advisory opinion is being sent in advance of the SEI filing deadline, the question regarding
whether the requester will be required to file an SEI in the event a response is not received by the SEI
filing deadline is moot.
( 2) G. S. 138A­22(
a) requires that “ public servants” file Statements of Economic Interest, “ except for
public servants included under G. S. 138A­3(
30) b., e., f., or g. whose annual compensation from the
State is less than sixty thousand dollars ($ 60,000)….” An individual that falls within one of the
referenced categories and whose annual compensation is less than $ 60,000, are therefore not subject
to the SEI filing requirements of G. S. Chapter 138A.
( 3) G. S. 138A­24(
a)( 2) f. requires disclosure of “ nonpublicly owned companies” in which a public
servant, spouse, or members of the public servant’s immediate family have financial interests valued
at $ 10,000 or more. G. S. 138A­24(
a)( 2) i. also requires that the individual describe any “ material
business dealings, contracts, or other involvement” which the nonpublicly owned company, or other
companies in which that company owns securities or equity interests over $ 10,000, has with the
State, or if the company is “ regulated by” the State, if known. “ Regulatory relationship” is not
defined in the Act. If business entities are subject to certain routine filing requirements administered
by an agency, that authority, alone, would not constitute a “ regulatory relationship” with the State.
G. S. 138A­24(
a) 2. i. requires a description of the referenced relationships with the State “ if known.”
This would require the exercise of due diligence by reviewing information readily available, not
extensive investigation or research.
N. C. Ethics Commission 35
( 4) What follows is requested guidance on the extent to which certain relationships represent
“ memberships or affiliations” as used in G. S. 138A­24(
a)( 7). 44
· A “ membership” in an alumni association or other organization that the public servant did not
affirmatively join or in which the public servant does not actively participate would probably
not qualify as a “ membership or affiliation.” However, the specific circumstances of that
relationship would have to be provided in order to obtain specific guidance.
· An individual’s current status as a charitable donor may qualify as a “ membership or
affiliation,” but more specific information must be provided before this question can be
answered. However, a charity’s solicitation of donations from an individual would not be
considered a “ membership or affiliation.”
· An individual’s possession of a Harris Teeter VIC membership need not be disclosed in
response to question 14 on the 2007 SEI.
· Generally, an individual’s membership in a trade association with which his or her employing
entity “ may have jurisdiction” should be disclosed in response to question 14. If there are
particular organizations about which individual public servants have questions, they can
contact the Ethics Commission with that information.
If individuals have specific questions concerning whether information should be disclosed on an SEI, they
should contact the Ethics Commission.
AO­E­07­0013
No “ Cooling Off” Period for Legislators Serving as Liaison Personnel
G. S. 120C­100(
a)( 10), ­304,
­501(
a)
October 2, 2007
Legal counsel requested a formal advisory opinion on the question of whether a State legislator is required to
wait six months before serving as a liaison personnel ( also called a legislative liaison) under Chapter 120C
of the North Carolina General Statutes (“ N. C. G. S.”), the Lobbying Law.
The specific question was as follows: under N. C. G. S. § 120C­304,
may a former legislator serve as liaison
personnel ( legislative liaison) for a public entity immediately upon leaving public office? Put differently,
does § 120C­304
require a former legislator to wait six ( 6) months after leaving public office before he or
she may be employed as a legislative liaison?
A former legislator may go to work as a legislative liaison without waiting the six ( 6) months required by
N. C. G. S. § 120C­304(
a). The six­month
" cooling off" period does not apply to such liaison personnel.
As a general rule, legislators or former legislators may not register as lobbyists under Chapter 120C either
( 1) while in office or ( 2) before the later of the close of session as set forth in N. C. G. S. § 120C­44
Section 34 of Session Law 2007­348
( House Bill 1111) amended G. S. 138A­24(
a)( 7), effective August 9,
2007. As amended, G. S. 138A­24(
a)( 7) now requires disclosure of such organizations in which a public
servant or his or her immediate family is a “ director, officer, or governing board member.”
N. C. Ethics Commission 36
100( a)( 4) b. 1 45 or six months after leaving office. N. C. G. S. § 120C­304(
a), as amended by section 13.( a) of
House Bill 1111 ( Session Law 2007­348).
This six­month
waiting period expressly applies to legislators or
former legislators acting as lobbyists and is commonly referred to as a “ cooling off” period.
Recently­enacted
House Bill 1111 ( Session Law 2007­348)
amended the definition of “ lobbyist,” but did not
change the express exclusion from that term for liaison personnel:
The term “ lobbyist” shall not include individuals who are specifically exempted from this Chapter by
G. S. 120C­700
or registered as liaison personnel under Article 5 or this Chapter.
N. C. G. S. § 120C­100(
a)( 10), as amended by sections 8.( a) and 8.( b) of House Bill 1111 ( Session Law 2007­348).
“ Liaison personnel” is d